Market Preview: ASX 200 futures indicate a 33-point (0.4%) higher opening at 8,860 points following positive Wall Street session. Yesterday’s 0.6% decline to 8,827.1 points looks set for reversal.
Australian shares appear poised for a recovery Thursday morning after Wall Street delivered broad-based gains overnight. The ASX 200 futures market points to renewed buying interest, particularly in mining and resources stocks that have been driving recent market rotation.
Overnight US Markets Provide Positive Lead
Wall Street’s strength has set a constructive tone for local trading. The Dow Jones gained 1.0 percent, while the S&P 500 rose 0.2 percent in late trade. Technology stocks on the Nasdaq edged slightly higher, suggesting broader market stability.
The positive sentiment comes despite ongoing uncertainty about Federal Reserve policy direction. Market expectations for September rate cuts have fluctuated following recent Fed commentary, but traders appear increasingly confident that monetary easing will resume in coming months.
Mining Sector Momentum Continues
The sector rotation favouring resources over financials shows little sign of abating. Gold prices pushed higher overnight to $3,408.3 per ounce, supported by a weaker US dollar and growing rate cut expectations. This development should benefit ASX-listed gold miners including Northern Star Resources and Newmont Corporation.
Iron ore prices have also stabilised around$95.65 per tonne, providing support for heavyweight miners BHP Group, Rio Tinto, and Fortescue Metals Group. The recent Diggers and Dealers Mining Forum in Kalgoorlie appears to have rekindled investor enthusiasm for the sector.
Banking Sector Faces Continued Headwinds
Financial stocks remain under pressure as profit-taking continues following recent rate cut announcements. Commonwealth Bank has declined 6.1 percent over the past six sessions, while ANZ and Macquarie have also faced selling pressure.
The RBA’s recent decision to cut the cash rate to 3.60 percent has created mixed sentiment for banks. While lower rates typically compress net interest margins, they also reduce credit risks and can stimulate lending growth.
Energy Stocks Face Oil Price Pressure
Oil prices tumbled overnight, creating headwinds for energy companies. Santos and Beach Energy could face renewed selling pressure when trading commences. Beach Energy’s recent earnings update and dividend announcement may provide some support, but broader sector sentiment remains challenged.
Telstra Results in Focus
Market attention will centre on Telstra Group’s full-year results release this morning. Macquarie analysts expect revenue growth of 1.0 percent to $23.687 billion and underlying EBITDA rising 5.0 percent to $8.655 billion. The market anticipates a fully franked dividend of 19 cents per share.
Economic Context Supporting Markets
Australia’s improved economic backdrop continues supporting market sentiment. Inflation has fallen to 2.1 percent in the June quarter, sitting comfortably within the RBA’s 2-3 percent target range. Employment conditions remain solid with unemployment at 4.3 percent.
The combination of moderating inflation, steady employment, and accommodative monetary policy provides a constructive environment for equity markets, particularly growth-sensitive sectors like resources.
Also Read: Ausgold Locks in Land and Water Access to Advance Katanning Gold Project Development
Market Outlook
Trading volumes may remain subdued as investors digest corporate earnings and assess the sustainability of the current sector rotation. The materials sector’s outperformance reflects broader global trends favouring commodities and critical minerals.
Key resistance for the ASX 200 sits around 8,900 points, with support evident near 8,800 points. A convincing break above resistance could target the index’s recent highs near 8,950 points.
Investors will monitor US employment data due Friday and continue assessing the trajectory of monetary policy in both Australia and the United States. The interplay between economic data, central bank policy, and corporate earnings will likely determine near-term market direction.
Today’s Key Watch Points:
- Telstra Group full-year results
- Gold miner performance following overnight price gains
- Banking sector reaction to continued rotation themes
- Energy stock response to lower oil prices
