The Australian sharemarket staged a remarkable recovery on Tuesday after a sharp decline at the opening bell, as seven of the 11 sectors finished in positive territory. The benchmark ASX 200 lost 20.90 points, or 0.24 per cent, to 8604.20, while the broader All Ordinaries index fell 31.10 points, or 0.35 per cent, to 8824.80.
Market Rally Driven by Telecom and Consumer Stocks
Telecommunications stocks led the recovery, with Telstra jumping 2.21 per cent to $5.08, TPG adding 1.10 per cent to $3.67, and Chorus Limited rallying 3.75 per cent to $8.02. Consumer stocks also performed well, with Woolworths up 2.21 per cent to $36.48 and Coles closing 1.80 per cent higher to $22.61. Healthcare stocks gained, with CSL closing 1.59 per cent higher to $99.47, ResMed jumping 1.30 per cent to $28, and Ramsay Health Care adding 2.79 per cent to $37.64.
Miners Weigh on Index
Offsetting the gains were major iron ore producers, as the commodity price continued to slide. Iron ore futures fell to $US101 ($A143), dragging BHP down 1.89 per cent to $60.08, Rio Tinto 1.81 per cent to $181.23, and Fortescue 3.80 per cent to $19.75. The initial market pressure followed heavy losses on Wall Street and across Asia, including an eight per cent slump on South Korea's Kospi.
Analyst Commentary on Recovery
IG market analyst Tony Sycamore described the recovery as remarkable after a “stomach churning” 134-point fall at the open. “The sharp early falls came as the ASX200 responded to Friday night’s heavy losses on Wall Street, triggered by a robust non-farm payrolls report that pulled forward pricing for the first Fed rate hike into late 2026,” he said. Markets turned after investors grew more confident that a ceasefire between Israel and Iran would hold, following US President Donald Trump's call for both sides to “immediately stop shooting.”
Rate Cut Hopes Boost Consumer Sectors
Weaker-than-expected local consumer and business confidence data added to rate cut hopes in Australia. Westpac's consumer confidence fell 2.9 per cent in May to 80.6, while the NAB Business Survey showed confidence improved slightly to -14 but remains weak. “Some support emerged for the interest-rate sensitive consumer sectors after NAB chief economist Sally Auld said she no longer expects another RBA rate hike this cycle and believes the next move is likely lower,” Mr Sycamore added.
Company News Highlights
In individual company news, James Hardie shares dropped 2.4 per cent to $31.32 after a shareholder class action alleged the building company misled investors over forecasted earnings. James Hardie denies the allegation and will “vigorously defend” the proceedings. OOh!media shares leapt 9.6 per cent to $1.37 after receiving a $765 million takeover bid from Bain Capital. Zip Co was the biggest winner on Tuesday, up 5.88 per cent to $2.52, while Emerald Resources was the biggest laggard, down 9.03 per cent to $5.34.
The Australian dollar added 0.25 per cent against the greenback to buy 70.54 US cents.
