The Australian sharemarket opened lower on Thursday, despite a late rebound in United States stock futures as strong Micron Technology results boosted sentiment toward technology stocks.
By 10:30 am AEST (12:30 am GMT), the ASX 200 index was trading 0.4% lower.
The moves follow a mixed session on Wall Street overnight, where technology shares initially came under pressure because of continuing worries about high valuations and rising capital expenditure (capex) on artificial intelligence (AI) infrastructure.
The Dow Jones Industrial Average rose 0.4%, the S&P 500 slipped just 0.1%, and the Nasdaq Composite fell 0.4%.
Sentiment improved after the market closed when Micron comfortably exceeded Wall Street expectations with its quarterly results and guidance, sending its stock and equity futures prices higher.
The market was also boosted by crude oil prices dropping to their lowest point since the outbreak of the war between the United States and Iran, as concerns over supply disruptions through the Strait of Hormuz continued to ease.
“The Middle East conversation is wrapping up ... energy prices are coming off," Founder ETFs partner and portfolio manager Michael Monaghan was quoted as saying in this Reuters story.
"But you continue to have the AI capex buildout where, for some reason, people like the recipients of the spend and have been punishing those doing the spending."
The Australian market had closed a little higher on Wednesday following the release of May inflation data, which indicated the Reserve Bank of Australia may need to raise interest rates again.
The ASX 200 Index rose 0.2% on Wednesday as nine of the 11 sectors closed up after underlying inflation increased more than expected.
Stocks to watch include a2 Milk (ASX: A2M), which declared a $300 million special dividend, while the strength in technology stocks in the U.S. may spill over to the ASX.
Market participants will also be monitoring fresh employment data from the Australian Bureau of Statistics (ABS) at 11:30 am AEST.
On the bond markets, yields on Australian Government bonds were steady with two-year rates at 4.416% and 10-year rates at 4.716% at the time of writing.
