The Australian share market opened lower on Tuesday as mining shares dragged the index down, offsetting gains in consumer staples. Investors closely tracked Wall Street sentiment, where uncertainty over Federal Reserve rate cuts rattled global markets.
Sharemarket Performance in Morning Trade
The S&P/ASX 200 Index fell 31.4 points, or 0.4 per cent, to 8941 at 11.02 am AEST. The index was 24.8 points, or 0.3 per cent, lower at 8947.60 at midday. Seven of 11 industry sectors traded lower, with materials and technology contributing most to the benchmark’s decline.
The Australian dollar was slightly higher, 0.1 per cent up at US$64.90 at 10:27 a.m. That came after the index rose 0.1 per cent in Monday’s trading.
Coles Tops Consumer Staples
Coles Group delivered above-expectation full-year results that saw its shares rise 7.6 per cent in early trade and 9.2 per cent later in the day. The group also recorded a 2.4 per cent increase in net profit to $1.08 billion for the year to June 29.
Supermarket sales rose 4.3 per cent to $40 billion, ahead of market expectations. Underlying EBIT was 6.1 per cent above consensus due to strong grocery demand. Rival Woolworths, which releases results on Wednesday, also rose 1.6 per cent.
Fortescue Reports 41% Profit Decline
Mining giant Fortescue Metals weighed on the index after it posted a 41 per cent fall in full-year profit. Net profit was US$3.37 billion ($5.2 billion), down from US$5.72 billion last year, as iron ore prices eased on Chinese demand.
Revenue fell 15 per cent to US$15.5 billion from US$18.22 billion. Average revenue for hematite fell 18 per cent to US$85 per dry metric tonne. Dividend payments were reduced to $1.10 per share, 44 per cent down from last year, even as it achieved record shipments of 198.4 million tonnes.
Fortescue shares were 2.4 per cent down to $19.53 at noon. However, Jarden analysts described the results as solid, referring to the miner’s industry-leading cost position and a robust balance sheet entering FY26.
Pressure on Mining Sector
Mining giants BHP, Rio Tinto, and Fortescue slipped, dragging the resources-heavy ASX 200 lower
Fortescue’s decline pulled down the broader resources sector. BHP lost 0.8 per cent and Rio Tinto shed 0.5 per cent in early trading. BHP was 0.5 per cent down and Rio Tinto lost 0.2 per cent at midday.
Mining stocks represent nearly 20 per cent of the ASX 200, so sector performance is instrumental to overall market direction. Analysts said dividend cuts to a seven-year low also added to negative sentiment for resource shares.
Banks and Other Shares
The major banks were dispersed throughout the session. National Australia Bank rose 0.3 per cent, Commonwealth Bank edged up 0.1 per cent, but Westpac fell 0.3 per cent and ANZ lost 0.5 per cent.
Childcare operator G8 Education dropped 3.6 per cent to a five-year low of 84¢, despite reporting a 12 per cent increase in profit to $22.5 million. The group attributed reduced occupancy at its 399 centres to sector-wide problems instead of its recent Victoria scandal.
Corporate Travel Management announced that its shares will be halted until late September. The company’s auditors flagged possible revenue and cost timing adjustments, which would decrease its FY25 profit while boosting the prior year’s results.
Wall Street Influence
Weak sentiment came after the overnight pullback on Wall Street. The S&P 500 fell 0.4 per cent, the Dow Jones lost 0.8 per cent, and the Nasdaq shed 0.2 per cent. Gains in major technology stocks like Alphabet and Nvidia limited losses.
Investors are cautious ahead of key US inflation data and the Federal Reserve’s September meeting. Traders continue to price in an 86 per cent likelihood of a quarter-point rate cut, according to CME Group.
Also Read: ASX 200 Shows Resilience in Tuesday Trading as Mining Stocks Lead Market Rally
Market Outlook
The Australian sharemarket is expected to remain volatile as investors weigh up local earnings against global monetary policy signals. Consumer staples, led by Coles, provided support for the index, but resources continue to be weighed down by declining commodity prices.
Attention will turn to Woolworths’ earnings on Wednesday and Nvidia’s highly anticipated results in the US later this week. Dealers will also be watching US inflation numbers closely for any indication of when the Federal Reserve rate cuts will come.
