Australian stocks flat ahead of Fed, local signals mixed
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Australian equities closed marginally lower on Tuesday, with the S&P/ASX 200 ending flat at 8,151.4 points, as investor caution prevailed ahead of the upcoming U.S. Federal Reserve interest rate decision. Wall Street’s indecisiveness echoed in local markets, where expectations of immediate rate cuts are being reassessed in light of trade-driven volatility and firmer U.S. data, leaving room for Chair Jerome Powell to maintain a hawkish stance.
Invesco’s Global Market Strategy Office highlighted that prolonged policy uncertainty could ultimately weigh on economic momentum, underscoring the delicate balance central banks must navigate. This sentiment was mirrored in domestic economic indicators, which painted a mixed picture. The number of approved dwellings in Australia fell sharply by 8.8% in March, deepening from a 0.3% decline in February, according to the Australian Bureau of Statistics. Meanwhile, household spending contracted by 0.3% in March, snapping a five-month growth streak.
Despite the cooling in hard data, consumer sentiment showed a modest rebound. ANZ Research and Roy Morgan reported a 4.1-point increase in consumer confidence in the week ending May 4, pushing the index to 87.5. The rise reflects improved household perceptions of both personal financial conditions and the broader economic outlook.
On the corporate front, Nextdc stood out with an 8.3% surge in share price after announcing a 30% increase in contracted utilization, reaching 228 megawatts by the end of March. The growth was largely driven by AI-related customer demand, with Victoria contributing 114 megawatts—now a critical hub in the company’s data center expansion strategy.
In contrast, Platinum Investment Management shares dropped 6.7% after reporting a decline in total funds under management to AU$9.65 billion as of April 30, down from AU$10.28 billion a month earlier. The outflows highlight persistent challenges in attracting and retaining capital amid volatile global markets.
Sigma Healthcare also faced pressure, shedding 6.7% by market close. Although its earnings trajectory remains broadly aligned with Chemist Warehouse Group’s 36% EBIT growth for the first half, investor reaction suggests skepticism regarding the company’s pace of operational recovery and earnings quality.
Overall, the Australian equity market remains in a holding pattern, with investor attention firmly fixed on the U.S. Fed’s next move. In the short term, data center growth and AI adoption offer pockets of resilience, while broader economic indicators and international monetary policy decisions continue to shape sentiment and risk appetite.
Invesco’s Global Market Strategy Office highlighted that prolonged policy uncertainty could ultimately weigh on economic momentum, underscoring the delicate balance central banks must navigate. This sentiment was mirrored in domestic economic indicators, which painted a mixed picture. The number of approved dwellings in Australia fell sharply by 8.8% in March, deepening from a 0.3% decline in February, according to the Australian Bureau of Statistics. Meanwhile, household spending contracted by 0.3% in March, snapping a five-month growth streak.
Despite the cooling in hard data, consumer sentiment showed a modest rebound. ANZ Research and Roy Morgan reported a 4.1-point increase in consumer confidence in the week ending May 4, pushing the index to 87.5. The rise reflects improved household perceptions of both personal financial conditions and the broader economic outlook.
On the corporate front, Nextdc stood out with an 8.3% surge in share price after announcing a 30% increase in contracted utilization, reaching 228 megawatts by the end of March. The growth was largely driven by AI-related customer demand, with Victoria contributing 114 megawatts—now a critical hub in the company’s data center expansion strategy.
In contrast, Platinum Investment Management shares dropped 6.7% after reporting a decline in total funds under management to AU$9.65 billion as of April 30, down from AU$10.28 billion a month earlier. The outflows highlight persistent challenges in attracting and retaining capital amid volatile global markets.
Sigma Healthcare also faced pressure, shedding 6.7% by market close. Although its earnings trajectory remains broadly aligned with Chemist Warehouse Group’s 36% EBIT growth for the first half, investor reaction suggests skepticism regarding the company’s pace of operational recovery and earnings quality.
Overall, the Australian equity market remains in a holding pattern, with investor attention firmly fixed on the U.S. Fed’s next move. In the short term, data center growth and AI adoption offer pockets of resilience, while broader economic indicators and international monetary policy decisions continue to shape sentiment and risk appetite.