Derek Rose
Updated ,first published
The Australian bourse has slipped, with a sell-off in precious metals, oil and other commodities dragging down resource companies as the US dollar surges and more ships pass through the Strait of Hormuz.
The benchmark S&P/ASX200 index on Thursday finished 59.7 points lower at 8748.7, a drop of 0.7 per cent, while the broader All Ordinaries fell 61 points, or 0.7 per cent, to 8951.6.
The bourse got a bit of a bounce around midday after the Australian Bureau of Statistics reported better-than-expected jobs figures for May, but the momentum couldn’t be sustained in afternoon trading.
The ASX200 finished trading as its lowest closing level in two weeks.
IG analyst Tony Sycamore said the selling pressure had been driven by two profit warnings – from Judo Bank and Worley – and a renewed slide in commodity prices, due to the surging US dollar.
The greenback has jumped to its highest level since May 2025, as measured against a basket of other currencies, amid bets the Federal Reserve will raise US interest rates later this year to combat inflation and limit fallout from the war.
Seven of the ASX’s 11 sectors finished higher, and four closed lower, including the heavyweight mining sector.
The energy sector was the biggest loser, dropping 2.5 per cent as oil prices fell to their lowest level since the war on Iran began on February 28.
Brent crude was changing hands at $US72.80 as tankers carrying millions of barrels of crude oil exited the Strait of Hormuz following the US-Iran peace deal.
Woodside fell 2.9 per cent to $27.43, Santos retreated 2.8 per cent to $7.04 and Whitehaven Coal also dipped 2.9 per cent, to $7.98.
The materials/mining sector dropped 2.3 per cent as the ascent of the greenback put pressure on commodity prices.
BHP dropped 1.7 per cent to $58.52, Rio Tinto lost 2.3 per cent to $169.99 and Fortescue retreated 1.6 per cent to $18.94.
Goldminers fared even worse, with Evolution down 3.8 per cent and Northern Star dropping 3.3 per cent, as the yellow metal dropped under $US4000 an ounce for the first time since November.
Mineral Resources fell 2.6 per cent to $64.14 as the mining services company said it would shutter its Lucky Bay mineral sands mine in regional WA, shedding 110 jobs, because of the conflict in the Middle East.
Health care was the biggest gainer, rising 2.6 per cent as companies that earn most of their money in US dollars gained ground, buoyed by the rallying greenback.
CSL added 2.3 per cent, Pro Medicus climbed 3.6 per cent and ResMed rose 4.6 per cent.
In the financial sector, NAB dropped 3.4 per cent to $37.45, Westpac fell 2.0 per cent to $35.06, ANZ dipped 2.2 per cent to $34.86 and CBA retreated 1.3 per cent to $162.70.
Judo Bank plunged 40.4 per cent to a two-year low of 92.5¢ after the business-focused bank said three troublesome loans had emerged in recent weeks.
Insurance companies had a good day, with IAG up 4.3 per cent, Medibank Private rising 2.7 per cent and Steadfast Group climbing 2.6 per cent.
Worley fell 9.7 per cent to $11.08 after the service provider to resource companies estimated that the Middle East conflict could impact its earnings by up to $60 million, even with the recent ceasefire.
“While there have been no project cancellations, customers continue to delay the commencement and award of new projects,” Worley said.
The Australian dollar dropped to its lowest level since late April against its US counterpart, trading for US68.91¢, from US69.06¢ at 5pm on Wednesday.
Overnight, technology stocks weighed on Wall Street again, but semiconductor company Micron’s forecast of $US50 billion ($73.2 billion) in fourth-quarter revenue after the closing bell was sharply higher than analysts’ expectations of around $US43 billion. The upbeat outlook boosted US futures ahead of Thursday trade in New York as confidence in the artificial-intelligence trade was reignited.
Before Micron’s results, declines for several influential tech heavyweights, including Microsoft, pulled Wall Street lower even though most stocks in the S&P 500 gained ground.
The S&P 500 fell 0.1 per cent. The Dow Jones, which is less weighted with tech stocks, rose 0.4 per cent. The Nasdaq composite fell 0.4 per cent.
AAP with AP, Bloomberg
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