The S&P/ASX 200 Index dropped by 31.2 points to 7736.3, with technology stocks being the worst performers, down 1.8%, and WiseTech plummeting 5.6%.
Australia’s inflation rate surged to 4% in May, the highest this year, driven by significant increases in automotive fuel and electricity prices.
We recommend selling Worley Limited (WOR) and switching to Ampol Limited (ALD). Our initial retention of WOR was based on the expectation of a rebound from its recent lows, which has not materialized.
Australian shares fell 1.1% by midday following higher-than-expected inflation data for May, which showed a 4% annual increase.
All 11 sectors were positive, led by the energy sector due to stronger oil prices. Key energy stocks such as Woodside, Santos, and Origin saw gains. Brent crude rose to $US85.98, marking an over 8% increase for the month.
Australian shares turned lower in the final hours of trading, with the S&P/ASX 200 down 16 points, or 0.2%, at 7761.60 around 2:30 pm. Despite gains in energy stocks, which remained the best-performing sector up 0.7%, the broader index faced moderate declines. Woodside shares rose by 1.2%, driven by overnight gains in oil and LNG.
Today, the Australian share market saw a broad rally, pushing the S&P/ASX 200 Index up by 0.9%, or 68.2 points, to 7768.5 by midday. All 11 sectors were in the green, with investors eagerly awaiting the Reserve Bank of Australia’s (RBA) cash rate decision at 2.30pm AEST.
A Wall Street sell-off impacted Australian capital markets on Friday, leading to a decline in shares across technology, retail, and banking sectors due to rising bond yields and reduced rate cut expectations.
Australian shares trimmed earlier losses, trading around 0.4% lower as trading entered its final hours. This follows Wall Street’s decline after the latest US Federal Reserve policy meeting minutes indicated concern about slow inflation progress.
We recommend reallocating 2% of our portfolio from Elders (ELD) to Nufarm (GNC). This decision is based on the realization of a 9.2% profit in Elders and the assessment that Nufarm is currently undervalued, as supported by its recent earnings report and market conditions.
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