ASX Set to Fall as Mining Stocks Slide; Xero Jumps 9.1%
The Australian sharemarket opened lower on Thursday as higher oil prices and weaker gold dragged on mining shares. The S&P/ASX 200 was down 0.4 per cent shortly after 11am AEDT, while Xero rallied on a $1 billion share buyback.
The ASX was set to fall on Thursday, with mining shares leading early losses as oil prices climbed again. Software maker Xero was the standout, rallying after it announced a $1 billion share buyback.
The S&P/ASX 200 was down 39.4 points, or 0.4 per cent, at 9113.80 shortly after 11am AEDT. Seven of its 11 industry sectors were in the red. The index added 0.3 per cent on Wednesday, and the Australian dollar was weaker at US68.44¢.
Xero lifts tech
Xero shares soared 9.1 per cent. The company said it plans to buy $1 billion of its shares over the next 12 months and raised its sales and earnings forecasts for the financial year.
First-half sales jumped 46 per cent to $NZ1.75 billion ($1.42 billion), Xero said, as it won 226,000 new customers.
WiseTech and Technology One initially joined the rally, then pared gains to 0.9 per cent and 0.6 per cent. Data centre operator NextDC rose 1.2 per cent. The tech strength did not lift the wider market.
Fresh uncertainty hangs over the sector after reports that Nvidia is preparing to oust its CEO and founder, Jensen Huang. The reports warn of major disruption to the AI industry.
Miners and banks
BHP fell 1.4 per cent and Rio Tinto lost 1.7 per cent. Gold miners also declined after bullion slipped below US$4000 an ounce. Hot US inflation data and hawkish comments from Federal Reserve officials reinforced expectations of a December rate hike.
The Big Four banks were mixed. Commonwealth Bank (CBA) gained 1.3 per cent despite a lawsuit from the corporate regulator, which alleges it overcharged tens of thousands of business customers millions of dollars in fees they were never told about.
NAB was flat after admitting it underpaid 66,000 workers $127 million over 14 years. Some workers are owed more than $87,000 each. The bank will repay $169 million in total, including super and interest, and make a $2 million "contrition payment" to the Fair Work Ombudsman. Westpac rose 0.9 per cent and ANZ lost 2 per cent.
Energy stocks were flat. Woodside edged up 0.1 per cent and Santos 0.5 per cent, while refiner Ampol dropped 0.7 per cent.
Oil climbed overnight as traders weighed mixed signals on ending the Iran war. West Texas Intermediate futures rose above US$86 a barrel after sliding about 5 per cent over two days. Brent was up 1.4 per cent to US$92.76.
Wall Street rebounds
A rebound in artificial intelligence stocks lifted Wall Street overnight. The S&P 500 rose 1.3 per cent, pulling within 2.6 per cent of its all-time high set last month. It has nearly recovered last week's sell-off, which was triggered by worries about an AI slowdown.
The Nasdaq composite gained 1.6 per cent and the Dow Jones Industrial Average added 254 points, or 0.5 per cent. CoreWeave, which rents out access to AI chips over the cloud, jumped 24.7 per cent after losing less money over the summer than analysts expected.
