Sharemarkets fall following Dutch chipmaker rout

Australia’s sharemarket has temporarily fallen from its record high on Tuesday, as tech stocks offset strong gains by banks and miners.

The Australian sharemarket has regressed from its 100-day record high on Wednesday, with the tech sector trading lower off the back of worse than expected results out of the US.

The benchmark ASX200 finished the session 33.70 points, or 0.41 per cent, lower at 8,284.70 as investors dumped consumer staples, information technology, healthcare and utilities shares.

The broader All Ordinaries fell 42.00 points, or 0.49 per cent, to 8,556.00. The Aussie dollar fell to a five-week low, trading down 0.5 per cent to 0.6768.

It’s bad news for travellers, with the Aussie dollar down by as much as 3.9 per cent from a 20-month high of 0.6942 two weeks ago.

The Australian dollar has dropped, down from a 20-month high of two weeks ago.

Trading on Wall Street on Tuesday night saw Dutch-based chip maker ASML, have its biggest one day drop since 1998 falling 16 per cent. This was due to the company flagging weak guidance in 2025, particularly with sales coming out of China.

The fall from one of the world’s leading manufacturers of chip-making equipment had a flow on impact on other semiconductor shares with Nvidia and ARM both trading down at 4.7 and 7.0 per cent respectively off the back of the ASML news.

This dragged the US market down overall, with the tech heavy Nasdaq index lower by 1 per cent and both the S & P 500 and Dow Jones trading down 0.75 per cent.

Moomoo market analyst Jessica Amir said there were two competing narratives, with Australian tech stocks falling with Wall Street, while stimulus packages and rate cuts internationally helped drive Australia’s banks and gold miners.

“It was a push and pull for the market today. We had gold stocks and banks moving higher. Companies like Evolution Mining reported stronger than expected guidance while Bank of Queensland reported stronger than expected profits, while tech stocks fell off the nose,” Ms Amir said.

The ASX 200 traded slightly down, following a 100-day high achieved on Tuesday. Picture Newswire/ Gaye Gerard.

Regis Resources was the strongest company on the ASX today up 7.08 per cent to $2.57 while, Bank of Queensland was up 6.53 per cent to $6.68.

The major Australian banks were generally strong on Wednesday, with all four trading higher, even though Commonwealth Bank flagged increasing competition and pressure on its net interest margins during its annual general meeting.

CBA’s cash net profit after tax was $9.8bn, down 2 per cent on the previous period.

Chairman Paul O’Malley said “this is the result of lower lending and deposit margins driven by increased competition and inflationary pressures on operating expenses, partly offset by volume growth and lower loan impairment expenses.”

Financials and A-REITs were the only two sectors that traded positively. Overall, 9 of the 11 sectors were down. Financial was the best performing sector, gaining +0.22% and +2.50% for the past five days.

One of the bright spots on the Australian market today were gold companies Newmont rose 2.58 per cent to $2.09, while Evolution mining was up 6.82 per cent to $5.01,

Both of these stocks are rallying due to a strong underlying commodity price, with gold now trading at $A4,022 an ounce at the time of writing.

“Gold stocks traditionally do really well when the US Federal Reserve is cutting interest rates,” she said.

The analyst said gold stocks are playing a bigger part in the make-up of Australia’s biggest companies as central banks continue their rate cutting cycle.

Originally published as Sharemarkets fall following Dutch chipmaker rout