Aussie shares slip in lead up to AI chipmaker earnings

Derek Rose |

Gloomy consumer confidence and anxiety on interest rates is weighing on some stocks.
Gloomy consumer confidence and anxiety on interest rates is weighing on some stocks.

The Australian share market has finished slightly lower in a quiet session before a make-or-break earnings report from AI chipmaker Nvidia. 

The benchmark S&P/ASX200 index on Tuesday dropped 12 points, or 0.15 per cent, to 7,851.7, while the broader All Ordinaries fell 11.9 points, or 0.15 per cent, to 8,120.2.

In addition to waiting for Nvidia’s earnings report on Thursday morning for a signal the AI craze is either just getting started or petering out, traders were digesting a gloomy domestic consumer confidence survey and latest minutes from the Reserve Bank.

The Westpac Consumer Confidence Index, based on a survey of 1,200 people last week, found sentiment dipped further last month.

Westpac senior economist Matthew Hassan said renewed cost-of-living pressures and inflation concerns had more than offset what looks to have been a fairly well-received federal budget.

“Consumer sentiment remains deeply pessimistic,” he said.

RBA minutes showed board members discussed raising rates at its May 6-7 meeting before leaving borrowing costs unchanged.

The ASX’s 11 sectors finished mixed, with four closing in the red, six in the green and financials basically unchanged.

James Hardie Industries was the biggest loser in the ASX200, plunging 14.8 per cent to a six-month low of $46.67 after the building materials company announced fourth-quarter earnings of $US232.5 million, slightly below expectations, and forecast lower sales in 2024/25.

“The outlook for the housing markets we participate in globally continues to remain uncertain,” James Hardie said.

Elsewhere in the materials sector, BHP rose 0.7 per cent to a three-month high of $46.04, as the hours ticked down to Thursday’s deadline for the Big Australian to make a formal takeover offer for Anglo American or walk away from the $64 billion deal.

Rio Tinto dropped 1.3 per cent to $134.09, Fortescue fell 0.8 per cent to $27.01 and goldminer Newmont dipped 0.9 per cent to $65.75.

In tech, Technology One grew 4.6 per cent to a two-month high of $16.75 after reporting a $48 million half-year profit, up 16 per cent from a year ago.

Chief executive Ed Chung said the Brisbane-based company had won a number of contracts, including from Newcastle City Council in NSW, New Plymouth District Council in New Zealand and the Australian Securities and Investments Commission.

Telstra fell 2.7 per cent to $3.57 after announcing plans to cut 2,800 jobs as part of a cost-cutting measure to its enterprise business.

The Big Four banks were mixed, with ANZ up 0.5 per cent to $28.31, Westpac gaining 0.4 per cent to $27.07, CBA basically flat at $121.79 and NAB edging 0.1 per cent lower at $34.71.

Sonic Healthcare dropped 6.0 per cent to a four-year low of $25.01 after the global pathology business said its recent profit growth had been lower than expected.

“Our current robust topline growth, organic and non-organic, in a setting of inflationary cost pressures, have combined to delay the completion of our programs to align labour costs more closely with post-pandemic conditions,” chief executive Colin Goldschmidt said.

ALS rose 5.0 per cent to $14.48 after the global laboratory testing company reported full-year earnings of $491.8 million, a slight increase of 0.2 per cent.

The Australian dollar was buying 66.56 cents, down from close to a five-month high of 67.00 US cents at Monday’s ASX close.

In cryptocurrency, Ethereum surged nearly 20 per cent to a five-week high of $US3,677 ($A5,470) on rumours US regulators are about to approve Ethereum exchange-traded funds, similar to the Bitcoin ETFs approved in January.

ON THE ASX:

* The benchmark S&P/ASX200 closed on Tuesday down 12  points, or 0.15 per cent, to 7,851.7.

* The broader All Ordinaries dropped 11.9 points, or 0.15 per cent, to 8,120.2.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 66.56 US cents, from 67.00 US cents at Monday’s ASX close

* 103.97 Japanese yen, from 104.30 Japanese yen

* 61.31 Euro cents, from 61.55 Euro cents

* 52.37 British pence, from 52.73 pence

* 109.16 NZ cents, from 109.34 NZ cents. 

AAP