ASX slips back into the red; Wall Street got Tesla boost

By Millie Muroi

The Australian sharemarket weakened on Tuesday despite a positive lead from Wall Street, with energy companies weighing down the index following a brief recovery on Monday.

The S&P/ASX 200 was down 13.5 points, or 0.2 per cent, to 7178.8 about 12pm AEST even as healthcare and mining companies traded in the green.

Wall Street has made a positive start to the week.
Wall Street has made a positive start to the week. Credit: AP

The Australian dollar pared back its recent losses, climbing 0.8 per cent on Monday and fetching 64.20 US cents about 12pm AEST as the greenback declined against major currencies.

Miners (up 0.3 per cent) were among the strongest companies on the local bourse as lithium miners Pilbara Minerals (up 1.6 per cent) and Allkem (up 1.2 per cent) both advanced. Iron ore heavyweights Rio Tinto (up 1.4 per cent), BHP (up 0.7 per cent) and Fortescue (up 1.2 per cent) were also among the biggest large-cap advancers. It comes as the iron ore price rallied 4 per cent.

Shares in healthcare companies (up 0.5 per cent) also increased as Resmed (up 1.3 per cent) and Fisher and Paykel Healthcare (up 0.9 per cent) pared back Monday’s losses.

Energy companies (down 1.5 per cent) were among the biggest losers despite a 0.2 per cent increase in Brent crude oil prices overnight. Heavyweight Woodside shed 1.4 per cent, Santos lost 1.5 per cent and Ampol slipped 0.7 per cent.

BlueScope Steel (down 3 per cent), Lynas Rare Earths (down 2.8 per cent) and Mercury NZ (down 2.6 per cent) were among the biggest large-cap decliners with ProMedicus (down 2.5 per cent) bucking the trend among healthcare companies.

Overnight on Wall Street, a rally for Big Tech stocks on helped the US sharemarket claw back about half its loss from last week.


The S&P 500 closed 0.7 per cent higher, the Dow Jones added 0.3 per cent and the Nasdaq composite jumped by 1.1 per cent.

Like last week, some big technology-oriented stocks led the way. Tesla jumped 10.1 per cent as Morgan Stanley said its Dojo supercomputer may boost its value by up to $US500 billion ($778 billion), Amazon climbed 3.5 per cent and Facebook owner Meta rose 3.2 per cent.

This upcoming week will offer a huge data point for the Federal Reserve, which is weighing whether to keep raising interest rates in its effort to get inflation back to 2 per cent. On Wednesday, the US government will offer the latest monthly update on prices consumers are paying across the economy, and the forecast is they were 3.6 per cent higher in August than a year earlier.

Economists say a report on Thursday about inflation at the wholesale level will be nearly as important as the data on inflation at the consumer level. High growth for wages in the health care industry could be pushing upward on inflation there, they say.

A separate report on Thursday will also show how much US households spent at retailers last month. Strong spending there recently has helped the world’s largest economy avoid a long-predicted recession. But it also could encourage companies to keep trying to raise prices, pushing upward on inflation.

Yields held relatively steady on Monday, with the 10-year Treasury yield up to 4.28 per cent from 4.26 per cent late Friday. The two-year Treasury yield, which moves more closely with expectations for the Fed, rose to 5.00 per cent after drifting through the day, up slightly from 4.99 per cent late Friday.

Most traders expect the Federal Reserve to leave rates where they are at its meeting next week, according to data from CME Group. But many are bracing for another possible hike by the end of this year, while paring expectations for cuts to rates next year.

Apple rose 0.7 per cent ahead of a Tuesday event where it’s expected to release its latest iPhone model. How Apple performs has great consequence for the market because it’s the most valuable stock on Wall Street. That means its movements pack more weight on the S&P 500 and other indexes than any other stock.

Stock indexes were mixed across the rest of Asia and higher in Europe.

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