ASX inches up; BHP’s iron ore record; SpaceX falls below IPO price

The Australian sharemarket has edged higher at the open after Wall Street climbed overnight, while BHP announced record iron ore production over the last financial year.

The S&P/ASX 200 was up 5.3 points, or 0.1 per cent, in early trade, with seven of 11 industry sectors in positive territory. The ASX added 0.4 per cent on Wednesday. The Australian dollar is trading at US69.96¢.

BHP was down 1.2 per cent in early trade to pare some of Wednesday’s 3.2 per cent gain. The resources giant announced in its quarterly update on Thursday it had produced a record 265 million tonnes of iron ore over the last financial year despite volatile commodity markets. The miner said its copper output was also near the top end of its guidance.

Chief executive Brandon Craig said the broader global economic picture was “resilient” despite the volatility in commodity markets as a result of the US-Iran war. “We continue to see strength in the US and China, even as the global economy adjusts to evolving trade dynamics,” he said.

Iron ore production was 1 per cent higher than the previous year and copper production, which fell 3 per cent compared to the previous year, was around 1.95 million tonnes. Fellow iron ore heavyweights Fortescue (down 0.7 per cent) and Rio Tinto (down 0.3 per cent) were also lower. Gold miners slid lower with the price of the precious metal dipping to be trading just above $US4000 per ounce, as traders weighed softer-than-expected inflation data against escalating attacks in the Middle East for clues to the Federal Reserve’s interest-rate path. Northern Star lost 0.6 per cent and Evolution Mining fell 2.7 per cent in early trade.

Energy stocks are mixed in early trade. Crude oil extended gains as the US launched fresh strikes on Iran, raising concerns that Middle East tensions will further disrupt energy supplies. Woodside Energy lost 0.8 per cent and Santos edged up 0.1 per cent. Among the refiners, Ampol inched up 0.1 per cent and Viva Energy slid 0.4 per cent.

Financial stocks are stronger, with Commonwealth Bank up 0.9 per cent, National Australia Bank climbing 1 per cent, Westpac advancing 0.3 per cent and ANZ Bank adding 0.7 per cent. AMP jumped 1.9 per cent in early trade after upping its guidance. The wealth manager now expects first-half underlying net profit after tax to be between $170 million and $180 million.

Technology stocks are mixed in early trade, with WiseTech up 0.5 per cent, Xero rising 1.5 per cent, Technology One losing 0.9 per cent and NEXTDC dipping 0.1 per cent.

Overnight, the S&P 500 rose 0.4 per cent after flipping between modest gains and losses through the day, and it’s back within 0.5 per cent of its all-time high set last month. The Dow Jones added 150 points, or 0.3 per cent, and the Nasdaq composite climbed 0.6 per cent.

Investment giant BlackRock helped lead the market with a rise of 6.6 per cent after the company behind some of the most popular investment funds reported stronger profit and revenue for the latest quarter than analysts expected. CEO Laurence Fink said its iShares funds topped $US6 trillion ($8.6 trillion) in assets under management during the quarter, roughly doubling in three years.

SpaceX shares slumped to their lowest level since the rocket, satellite, and artificial intelligence company went public, briefly falling below their initial public offering price, as investor fanfare quickly evaporated in the month since its trading debut.

The stock fell 0.6 per cent to close at $US135.27 on Wednesday, ending the day just above the $US135 per share level that SpaceX sold them to investors at last month as part of a record $US86 billion offering after slumping below the key level intraday. It was the fourth consecutive day of declines for the stock.

The broad US stock market got a lift from another report showing inflation slowed last month. It said inflation at the wholesale level slowed to 5.5 per cent from 6 per cent in May, and it was much better than the acceleration that economists expected.

The day before, a separate report said inflation that US consumers are feeling was also not as bad as economists expected last month.

Such numbers take pressure off the Federal Reserve, which is considering raising interest rates. Higher rates would keep a lid on inflation, but they also slow the economy and hurt prices for all kinds of investments.

Following the inflation report, traders see just a 10 per cent chance that the Fed will raise its main interest rate at its next meeting in a couple of weeks. That’s down from the nearly 42 per cent probability they saw on Monday, before the inflation reports, according to data from CME Group.

Also helping to pull down expectations was a speech from John Williams, president of the New York Fed. He said that “there are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters.”

Fed Chair Kevin Warsh, meanwhile, gave few clues on what to expect in testimony before a Senate committee. “Any central banker would be happy to have data going in the right direction,” he said about this week’s encouraging inflation reports, but “these are all imperfect measures of the state of underlying inflation.”

The yield on the 10-year Treasury fell to 4.55 per cent from 4.58 per cent late Tuesday and from 4.62 per cent the day before.

With AP, Bloomberg

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