The Australian sharemarket recovered some of its losses on Friday following a variable end on Wall Street overnight as investors consider a lender’s loan quality warning and their trading strategies ahead of the end of the financial year.
By 10:25 am AEST (12:25 am GMT), the ASX 200 index was trading 0.2% higher.
This came after strong earnings from chipmakers helped offset renewed weakness in giant technology stocks and improve sentiment about artificial intelligence (AI)-linked companies in New York.
Although Micron Technology stock soared after it beat Wall Street estimates with its quarterly earnings and outlook, some investors remain worried about spending on AI and potential interest rate increases.
"The market realised that one company's blowout earnings and revenues mean someone else is paying the price for that down the line," BMO Family Office chief investment officer Carol Schleif was quoted as saying in a Reuters article.
"For Micron to generate the kinds of earnings and revenues they do, it's coming out of somebody else's hide."
Among major United States benchmark indexes, the Dow Jones Industrial Average edged 0.1% higher while the S&P 500 dipped 0.01% and the Nasdaq Composite dropped 0.5%.
The Australian market finished lower on Thursday with the ASX 200 Index dropping 0.7% as gains for most market sectors were offset by falling energy and mining stocks.
Judo Bank (ASX: JDO) shares fell 40.4% on Thursday after it reported a deterioration in asset quality, significantly raised loan provisions and raised concerns about future earnings growth.
Burrell Stockbroking wealth adviser Adam Dight said clients were being urged to crystallise tax losses before the end of the financial year by selling companies that had fallen in value, including those in the health care sector like CSL (ASX: CSL).
This was particularly the recommendation for clients subject to the new tax regime for high superannuation account balances.
The loan problems disclosed by Judo Bank could undermine sentiment for financial stocks, but strong results from Micron might support the technology sector, he said.
On the bond markets, yields rose on Australian Government bonds with two-year rates up by 0.66% to 4.455% and 10-year rates 0.91% higher at 4.738% at the time of writing.
