The Australian sharemarket experienced a downturn on Tuesday, primarily driven by declines in major banks and consumer staples. These losses overshadowed gains in the mining and materials sectors, notably a significant rally by BlueScope Steel. The steelmaker’s shares surged following the confirmation of a $13 billion takeover offer.
The S&P/ASX 200 closed down 45.8 points, or 0.5 percent, at 8682. This drop came despite a promising 0.4 percent increase in ASX futures earlier in the day, which had initially suggested potential gains for the local bourse. By the end of trading, nine out of eleven industry sectors were in the red.
BlueScope’s Rally Amid Takeover Bid
BlueScope Steel emerged as one of the day’s top performers, with its shares skyrocketing 20.6 percent to $29.48. This surge brought the stock close to the $30 per share price proposed by billionaire Kerry Stokes’ SGH Ltd and US steelmaker Steel Dynamics in their joint takeover bid.
The board of BlueScope is currently assessing the “highly conditional” proposal, which would necessitate both board and shareholder approval. Meanwhile, SGH shares also saw a boost, rising by 4.5 percent.
Mining Sector Shines Amidst Broader Decline
Despite the overall market decline, the mining sector provided some positive news. BHP, Australia’s largest miner, gained 1.4 percent, while its competitor Rio Tinto rose 1.8 percent. These gains were fueled by a robust rally in copper prices, which surpassed $US13,350 a tonne for the first time. This price surge was driven by a renewed rush to ship metal to the US, energizing bullish traders and investors.
Benchmark prices on the London Metal Exchange jumped as much as 4.7 percent overnight, marking a continuation of a trend that has seen copper prices increase by about 20 percent since mid-November.
Additionally, South 32, a BHP spin-off and owner of Australia’s largest silver mine, saw its shares rise by 3 percent. This was in response to a jump in gold and silver prices overnight, as investors weighed heightened geopolitical risks following the US capture of Venezuelan leader Nicolás Maduro. Spot gold rose as much as 2.9 percent, climbing above $US4455 an ounce, while silver gained 6 percent.
Financial and Consumer Staples Drag Down ASX
The financial sector was the most significant drag on the local market, as investors shifted funds towards the mining sector amid concerns about weak profit growth for banks. All of the big four banks experienced declines, with the Commonwealth Bank, Australia’s largest stock, falling by 3 percent. Westpac dropped 2.2 percent, National Australia Bank fell 2.4 percent, and ANZ Bank decreased by 2 percent.
Consumer staples also struggled, with major supermarket chains among the poorest performers. Woolworths and Coles saw their shares fall by 1.2 percent and 2.8 percent, respectively, while Endeavour, a bottle shop owner, lost 0.8 percent.
In contrast, energy stocks presented a mixed picture. US oil giants Chevron and ExxonMobil rallied on President Donald Trump’s plan for US oil companies to help rebuild Venezuela’s oil industry. However, Australia’s leading oil major, Woodside, only rose by 0.8 percent, while Santos added 0.5 percent.
Wall Street’s Contrasting Performance
Meanwhile, Wall Street painted a different picture, with a mix of energy companies and banks leading the market higher. The S&P 500 rose by 0.6 percent, and the Nasdaq composite added 0.7 percent, with tech-focused megacaps like Amazon and Tesla among the gainers. The Dow Jones Industrial Average increased by 1.2 percent.
Big US banks also posted solid gains, with JPMorgan Chase rising 2.6 percent and Bank of America jumping 1.6 percent.
Wall Street’s attention is also on the technology sector as the annual CES trade show kicks off in Las Vegas. Nvidia slipped 0.4 percent, while Google added 0.4 percent. Investors are particularly interested in advancements in artificial intelligence, a sector that has driven the broader market to a series of records in 2025. Companies like Nvidia have heavily invested in AI, making them some of the most valuable in the world.
Treasury yields fell in the bond market, with the yield on the 10-year US Treasuries dropping to 4.16 percent from 4.19 percent late on Friday. The two-year Treasury yield, closely tied to Federal Reserve expectations, fell to 3.46 percent from 3.48 percent.
Wall Street is also anticipating several economic updates this week, which the Federal Reserve will monitor closely as it determines interest rate policy. The central bank’s primary focus will be on upcoming reports on the US job market, including updates on job openings and overall employment. The Fed has been balancing a slowing job market against rising inflation risks as it considers whether to cut interest rates. Despite cutting its benchmark rate three times late in 2025, inflation has remained above its 2 percent target, prompting caution from the Fed.
