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The ASX endured its weakest session in a fortnight today, with a sharp selloff across the resources complex. The market opened lower and never really looked like bouncing, drifting steadily lower through the day as investors responded to a stronger US dollar, a more hawkish Federal Reserve and renewed pressure across commodity markets.
Materials were the biggest drag, with iron ore, gold, lithium and aluminium stocks all under pressure, especially BHP which accounted for a whopping -54pts of the index decline after announcing another cost blowout at its Canadian Jansen potash project. Energy stocks also struggled as oil prices continued to unwind their recent geopolitical premium following the US-Iran peace agreement and the reopening of the Strait of Hormuz. There were some pockets of resilience, with Healthcare continuing its recent strength and Consumer Staples outperformed as money flowed into defensive areas of the market.
- ASX 200: 8,828.70 / −82.40pts / −0.92%
- AUD/USD: 0.7008 / −0.09%
- Best sectors: Healthcare +3.51%, Consumer Staples +1.27%, Energy +0.49%
- Worst sectors: REITs −0.69%, Utilities −0.82%, Materials −4.03%
- BHP Group (ASX: BHP) −5.60% to $61.40 was responsible for more than half of the market’s decline after lifting the expected capital cost of its Jansen potash project to US$6.9bn, raising fresh concerns around execution risk and the economics of the broader growth pipeline.
- Another strong US dollar and softer commodity prices weighed heavily on the broader resources sector, with Rio Tinto (ASX: RIO) −3.12% to $177.37, Mineral Resources (ASX: MIN) −4.7%, South32 (ASX: S32) −2.8% and PLS Group (ASX: PLS) −4.70% to $5.88 all falling sharply.
- Gold miners gave back part of this week’s strong rally as bullion prices retreated. Newmont Corp (ASX: NEM) −6.66% to $143.47, Northern Star (ASX: NST) −3.1%, Evolution Mining (ASX: EVN) −5.07% to $12.54 and Bellevue Gold (ASX: BGL) −3.1% all finished lower.
- Electro Optic Systems (ASX: EOS) +14.13% to $10.66 surged after securing a US$124m (~A$177m) contract to supply its Slinger counter-drone weapon systems to UAE-based Generation 5, alongside a new 50/50 Abu Dhabi-based joint venture targeting next-generation laser weapon systems.
- CSL (ASX: CSL) +7.62% to $116.32 climbed to its highest level in six weeks as investors rotated into defensive healthcare names, recovering meaningfully from the sharp selloff that followed last month’s earnings downgrade.
- The defensive theme also supported the supermarkets, with Coles Group (ASX: COL) +1.24% to $23.66 and Woolworths Group (ASX: WOW) +0.52% to $38.32 outperforming the broader market.
- SkyCity Entertainment (ASX: SKC) +14.63% to 47c rallied strongly after reaching an agreement to pay $21m to settle anti-money laundering and counter-terrorism proceedings relating to its Adelaide casino operations.
- IDP Education (ASX: IEL) +6.67% to $2.56 gained after reaffirming FY26 EBIT expectations of around $122m, easing concerns around further earnings downgrades.
- Qantas Airways (ASX: QAN) +0.7% to $10.06 edged higher after Jarden reiterated support for Project Sunrise, estimating the initiative could contribute around $400m of EBIT annually once the full Airbus A350 fleet is operational, with lower oil prices also remaining a meaningful tailwind.
- Commonwealth Bank of Australia (ASX: CBA) +0.10% to $162.40 announced Victoria Ledda as its new Group Chief Information Officer and Rodrigo Castillo as Group Chief Technology Officer as the bank continues to increase its focus on digital capabilities, AI and technology investment.
- Macquarie Group (ASX: MQG) −1.17% to $249.82 slipped on broader market weakness, though also completed the purchase of approximately $734m worth of stock to fund employee profit-share and promotion awards.
- a2 Milk Co (ASX: A2M) +9.82% to $6.71 found support after UBS upgraded the stock to Buy, arguing the recent 35% de-rating more than reflects the impact of China supply disruptions and US product recall issues.
- Core Lithium (ASX: CXO) +5.17% to 30.5c commenced a new drilling program at the Blackbeard prospect within its Finniss operation, targeting resource growth and future mine life extension opportunities.
- Oil (WTI): ~US$77.90/bbl / +1.7%
- Gold: ~US$4,143/oz / -1.6%
- Iron Ore: ~US$98.50/mt / −0.70%
- Asian Markets: China -0.4%, Hong Kong −1.6%, Nikkei +0.1%
- Global Futures: FTSE −0.13%, S&P 500 E-Mini −0.48%, Dow E-Mini −0.31%
