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Chapter 1: What caused the Australian share market to slip again?
A listener production.
The ASX 200 largely runs on the spot despite seven of 11 sectors lifting. And how far is the Aussie market away from February's record high? Good afternoon. I'm Steve Daglian. It's Thursday, the 11th of June. Welcome to the CommSec Market Update. Good afternoon, everyone. Hope you've all had a very nice day. Well, what another choppy day it has certainly been for the Australian share market.
At one stage, we were down as much as 1.1% and we managed to steadily recover throughout the day. At one point, we snuck into positive territory at about 2.30pm Eastern Standard Time. It wasn't overly convincing and markets have finished the day in the red by around a quarter of 8%. Now, a lot has happened in overnight trade. The US market gave us quite a negative lead to work with.
It was down as much as 2% last night. So it wasn't surprising for us to get off to that quite slow start. Two things that have received most attention in overnight trade. One was inflation stats in the United States and two are renewed tensions in the Middle East. And they've both kind of created opposing forces, I guess, for the broad US markets.
US inflation data was generally well received, even though headline prices jumped to the highest levels in three years at 4.2% in May, or at least in the 12 months to May. That was largely because of the Middle East conflict and also the impact that's had on energy prices. So fuel airfare increases have been quite significant.
Encouragingly, though, core inflation, which strips out some of the most volatile items, actually came through softer than expected. So the market response here was fairly muted. Now, the better news on the US inflation front was very much offset by those tensions in the Middle East, which seemed to be getting worse. So in the last two days, the US launch... fresh strikes on Iran.
Iran has made threats and attacks of its own, and this has really marked one of the more significant escalations since Washington and Tehran agreed to a ceasefire in April, and they very much threatened what continues to be a very shaky ceasefire. Now, for those wondering, the ASX 200 is now roughly 6% away from the record high that was last hit about three months ago.
And obviously, the war in the Middle East has had a major part to play there. Now, across the sectors today, what seemed to help our market most was the fact that we had major miners, or at least some of the big players like BHP and Rio, turning positive. They were down quite heavily this morning. They've had a pretty rough week, week and a half now, but BHP was up 1% and Rio up a third.
So that was certainly helpful. We've had major banks heading in the other direction. So the financials are the big weight of the day. They fell between around 1.8% to as much as 2.6% by the afternoon. Westpac was the worst there. So that was certainly a heavy weight since it is the largest sector of our share market. Tech also struggled today down in the order of 2.2%.
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Chapter 2: How did US inflation data impact the Australian market?
Energy rose around 1.5% today. To be expected, we had around a 2% lift in oil prices last night and they're continuing to edge higher today. because of what we're seeing in the Middle East at the moment. President Trump, of course, saying that the US is going to attack Iran very hard if no peace deal was reached soon.
And then we had the US Defence Secretary, Pete Hegseth, also saying that Washington would strike key facilities. Iran vowed to attack new US targets if attacked. So all of this is certainly not helpful, but it is one, perhaps, reason why we had Woodside up one and a half and also Santos lifting in the order of 2%. Let's look at some of the winners on the market today. Individual names here.
We've got Len Lease, one of them. It's up in the order of 4.5%. This is after appointing a new chief executive. He'll be kicking off in that position from the 10th of September. This is Australian Super's head of Australian Real Assets, who's Nick O'Neill. And he spent 17 years in different arms of Macquarie Group infrastructure businesses as well.
At the same time, importantly though, Lendlease also maintained its profit goals for the year. We had QBE also lifting by more than 3.5%. It also announced an update to its board today. And Super Retail Group was in focus as well, lifting by around 1% for most of the day. Now, this is a group that operates Rebel, MacPak, BCF, Super Cheap Auto, and it updated investors today in Sydney.
and basically outlined its five-year growth strategy. So amongst other things, it wants to expand its store network beyond 900 locations by 2031. That's an additional 110 stores or around 22 a year from here.
So one of the things it wants to do is expand Supercheap Auto's range to capture more brands and also increase the product offering for electric vehicles, which it obviously sees as a growth area. We've seen some pretty strong growth in EV sales actually since the conflict first started in the Middle East.
And secondly, it's mentioned rather that the rollout of BCF Superstores, it wants to continue that growth. It wants to grow its MacPack store network as well. So for those who are wondering, this is part of its strategy day and companies on the ASX typically hold this annually.
So for those interested, you can actually find full presentation packs on what they actually discuss on their websites and they're publicly available. So generally under the investor relations website or investor and media sections of their corporate websites as well. If we look at some of the losers on the share market today, there are certainly quite a few.
Gold miners, once again, making an appearance. It's been the case now for some time. So the price of gold has fallen by a good 3.5% last night. Price of the precious metals really struggled recently as Fears of a wider US-backed war with Iran has stoked concerns around high interest rates this year in the United States. This is one thing to watch. Travel-related stocks did quite poorly as well.
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Chapter 3: What are the implications of Middle East tensions on global markets?
Now, looking forward to tomorrow, we've got Dino Nobel. trading ex-dividend. We've got Technology One paying out a dividend, but outside of that, relatively quiet on the local front here in Australia when it comes to things that are scheduled. But of course, we know that in this type of market, a lot can certainly happen and we'll wait and see.
how we do, I guess, in the day ahead in the United States and what this means for us tomorrow. On that front, have a great evening, everyone. Make sure to tune in to the morning podcast tomorrow to both Gil and James, and they'll get you updated on everything that happened in overnight trade, but also get you set and ready for the day ahead.
Ciao.
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