Australian shares pare losses as financials, miners rebound
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More news: The Australian sharemarket has pared early losses to trade almost flat, with investors buoyed by a rebound in Japan's Nikkei 225 index, which soared 8% in early trading, after a slump of more than 10% in the previous session.
The benchmark ASX 200 index was up 17 points or 0.2% at 7,651.30. Financials and mining shares led the gains, with CBA, ANZ, Macquarie Group and BHP up between 0.4% and 0.9%.
Overnight, US stocks extended their losses amid a shakeout in global markets over recession concerns for the world's largest economy. US Treasury yields tumbled to their lowest level in a year and traders now see a 92.5% probability that the US central bank will cut benchmark rates by 50 basis points in September.
Australian shares to start lower after Wall Street losses
The news: The Australian sharemarket is set to start lower, tracking extended losses on Wall Street overnight as fears of a US recession drive investors out of risky assets.
The numbers: The Dow Jones index ended 2.59% lower, while the broader S&P 500 lost 2.98% and the tech-heavy Nasdaq slid 3.38%. In the local market, ASX 200 futures were down 27 points or 0.36% to 7,576 points at 7am AEST on Tuesday.
The context: US stocks continued their downward trajectory amid a shakeout in global markets, with the recession concerns following weak economic data last week.
Indices pared losses after data showed US services sector activity in July rebounded from a four-year low amid a rise in orders and employment.
US Treasury yields tumbled to their lowest level in a year and a closely watched gap between 2- and 10-year Treasury notes turned positive for the first time since July 2022, usually indicating the economy is heading into a downturn.
Traders now see a 92.5% probability that the US central bank will cut benchmark rates by 50 basis points in September, compared with an 11% chance seen last week, according to CME's FedWatch Tool.
In the local market, investors will be focused on the Reserve Bank governor’s comments today, after the central bank's policy meeting to gauge the path for interest rates in Australia.
The source: Reuters
