The laggards

Consumer staples (down 0.4 per cent) were among the worst performers, with Coles (down 1.2 per cent) and Endeavour Group (down 0.4 per cent) leading the sector lower.

The healthcare sector (down 1 per cent) was also weaker, with shares of market heavyweight and hearing implants maker Cochlear losing 4.8 per cent.

Tech companies (down 0.5 per cent) declined as data centre operator NEXTDC slid 1.6 per cent.

Meridian Energy (down 4.7 per cent) was the worst large-cap performer, while James Hardie Industries (down 2.1 per cent) and Mercury Nz (down 2 per cent) were also among the biggest large-cap decliners.

The lowdown

IG Australia market analyst Tony Sycamore said it was a mixed day for some of the country’s largest sectors.

“The materials sector remains unloved, trading near a seven-month low as an uncertain outlook in China casts a shadow,” he said. “Elsewhere, it’s been a mixed day for the big banks after the ASX 200 financial sector hit a fresh seventeen-year high earlier this week.”

Sycamore said the S&P/ASX200 drifted lower without the positive influence of Wall Street. The US sharemarket was closed for trade for the Juneteenth public holiday, a day after the S&P 500 hit its 31st record high of 2024, powered by another surge in artificial intelligence bellwether Nvidia, now the world’s most valuable company.

Meanwhile, European stocks and US equity futures paused as traders sought fresh catalysts to extend the latest technology-driven gains.

The pan-European Stoxx 600 slipped 0.2 per cent after two days of gains, while bond yields across the euro area edged higher.

Oil prices were little changed, while iron ore added 1 per cent to $US107.30 a tonne in Singapore.

Loading

Despite a recent wobble driven by French political tensions, European stocks still stand about 2 per cent off their latest record highs.

Wall Street, meanwhile, has been lifted by the continued AI frenzy and resilient economic growth that should continue to support corporate earnings, especially in the technology sector. UK data added to signs inflation is slowing across the developed world, potentially allowing central banks to cut interest rates.

“We are in a soft landing scenario, central banks have started easing policy or will start to ease soon, and we may be facing a wave of positive productivity shocks thanks to technology,” said Benoit Anne, head of investment solutions at MFS Investment Management. “Put all that together, and you have a very supportive environment for global equities.”

While US Treasuries were not trading on Wednesday, government bond yields across Europe edged higher. UK 10-year government borrowing costs rose three basis points, and the pound firmed, despite data showing inflation had slowed to the Bank of England’s 2 per cent target.

The data likely rules out a rate cut at the BOE’s Thursday meeting, according to Zara Nokes, global market analyst at JPMorgan Asset Management.

Investors also kept an eye on developments in France, which got a scolding from the European Union for breaking the bloc’s deficit and debt rules.

French 10-year bond yields rose almost four basis points, while the spread relative to their German peers stayed at the widest since 2017 amid concerns that the upcoming snap election will result in a win for far-right groups with high-spending policies.

Tweet of the day

Quote of the day

“This potential practice of deliberate market manipulation, if substantiated, is perhaps one of the most serious interferences by supermarkets in the efficient and fair functioning of fresh produce markets,” said the National Farmers Federation’s Horticulture Council as farmer groups implore the competition watchdog to scrutinise whether supermarkets are deliberately pre-ordering too much fruit and vegetables from growers to ensure supply and drive down prices.

You may have missed

Major investors are rethinking their plans to keep ploughing billions of dollars into Australian renewable energy after the opposition pledged to power the electricity grid with nuclear reactors, ditch Australia’s 2030 climate targets and extend the role of fossil fuels.

with Bloomberg

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.