The Australian sharemarket ended flat on Thursday after retreating from record highs earlier in the session, with mixed economic data from both the United States and Australia lifting investor expectations for interest rate cuts and prompting mixed moves across key sectors.
The benchmark S&P/ASX 200 index slipped 2.9 points to close at 8,538.90. Seven of the 11 industry sectors finished in the red.
On Wall Street, the S&P 500 also closed largely unchanged overnight, as investors digested signs of weakening momentum in the U.S. economy. A surprise contraction in the services sector - the first in over a year - combined with slower-than-expected private hiring data raised the likelihood of monetary policy easing.
Markets are now pricing in at least two U.S. Federal Reserve rate cuts before year-end, lifting the interest-rate sensitive Nasdaq and supporting Australian tech shares.
TechnologyOne added 1.1%, Xero gained 0.6%, and Block ticked 0.1% higher.
Locally, as of 4 June, the ASX's RBA Rate Tracker indicated an 86% expectation of an interest rate decrease to 3.60% at the next RBA Board meeting.
Meanwhile, Mineral Resources soared 14.8%, Liontown Resources rose 5.7%, and Lynas Rare Earths jumped 12.5% as European automakers flagged supply chain issues tied to China’s rare earths export controls.
However, these gains were countered by mixed performance in the financial sector, with Commonwealth Bank up 0.1% to a new record, while National Australia Bank slipped 0.2% and ANZ finished flat.
Among individual companies, Catapult Group fell 1% after revealing its US$18 million acquisition of sports tech firm Perch.
IperionX popped 28.8% after announcing a watershed defence contract with the U.S. Department of Defence (DoD).
Tyro Payments slumped 10.4% after announcing CEO Jon Davey would resign to lead a private equity-backed company.
On the bond markets, Australian government yields lifted, with the 10-year yield up 1% to 4.25% and the 2-year yield at adding 0.8% to 3.298%.
