The S&P/ASX 200 declined on Tuesday as losses in the technology and mining sectors weighed on market sentiment, following a sell-off in US tech stocks. The benchmark index dropped 29 points, or 0.33 percent, closing at 8,787.
The technology sector led declines, falling 4 percent—the largest decrease among the seven sectors that retreated. Among individual tech stocks, Wisetech Global shares fell 4.4 percent amid ongoing controversy surrounding founder Richard White. White is reportedly under investigation by the Australian Federal Police over allegations related to sexual exploitation and providing false information on a visa application. Wisetech stated that the investigation, if any, concerns White personally and that the company itself is not being investigated. The company also quoted White denying any involvement in human trafficking. Other notable tech stock declines included NEXTDC down 1.7 percent, Xero down 5.3 percent, and TechnologyOne down 7.1 percent. Additional technology firms such as Simandner and DroneShield also posted losses, falling 6 percent and 4.5 percent, respectively.
The downward pressure in the tech sector coincided with broader weaknesses in US markets, where investors reacted to a heightened likelihood of a Federal Reserve interest rate hike. Markets currently assign about a 40 percent chance to a rate increase in July, while a 25 basis-point rise by September is fully priced in.
The mining sector also faced headwinds, partially attributed to a stronger US dollar. Gold prices dropped 1.6 percent, negatively impacting shares of Pantoro (down 6.1 percent), Catalyst Metals (down 6.2 percent), and Resolute Mining (down 5.7 percent). Meanwhile, iron ore futures slid to their lowest levels since early March amid signs of continued weakness in China’s construction sector and increased output from Rio Tinto’s Simandou mine in Guinea, which has accelerated shipments beyond expectations.
Energy stocks showed mixed performance on the back of easing oil prices, influenced by US-Iran peace talks. Rebecca Babin, senior energy trader at CIBC Private Wealth, cautioned that the ongoing negotiation process remains complex and lengthy, suggesting that current market pricing may be prematurely reflecting a surplus. Viva Energy confirmed its Geelong refinery would return to 90 percent capacity following an April fire; nevertheless, its shares fell 2.3 percent due to weaker energy prices. Santos was an exception among major energy firms, gaining 10 cents to $7.31, while Ampol, Yancoal, and Paladin declined.
Financial stocks provided some support to the market, reaching their highest levels since before the federal budget released on May 12. Analyst Tony Sycamore noted that investor confidence appeared buoyed by the government’s revised tax package introduced last week. Major banks such as Westpac, NAB, and ANZ each advanced between 1 and 1.4 percent, with Commonwealth Bank rising 0.5 percent.
In other sectors, Inghams fell 1.7 percent following the announcement of a full lockdown on its farms in Western Australia after bird flu cases were detected in wild birds approximately 700 kilometers away.