Australian shares ended Thursday's session with a 10.3-point gain, closing at 8,640.7, as reported by The Economic Times and Reuters. The benchmark formed a positive candlestick pattern that reflects renewed buying interest and improving market sentiment. The index remains below its 21-day Simple Moving Average (SMA), which continues to act as dynamic resistance and cap near-term upside momentum. Immediate support is located near 8,590.60, with holding above this level potentially helping stabilize the market and preserve the broader short-term uptrend.
Financials snapped a four-day losing streak to advance 1%, with the sub-index having lost more than 8% in the last four sessions, as reported by The Economic Times. The immediate trigger was a proposal from Australia's center-left Labor Party to limit negative gearing – a tax break that lets landlords deduct rental losses from other income – to newly built homes, and to replace the 50% capital gains tax discount with inflation indexation. Investors read this as making property investing less lucrative after tax, which could cool demand from would-be landlords and slow mortgage growth. Top lender Commonwealth Bank of Australia gained 1.8%, recovering from a 10.4% plunge in the previous session that was hurt by housing tax changes threatening to cool mortgage demand. According to Craig Sidney, senior investment adviser at Shaw and Partners, investors may be buying banks for dividend yield, as higher capital gains taxes post-budget are expected to tilt preference away from growth stocks.
The latest session's performance came as investors watched US-China talks for signs of easing trade tensions that could support growth and demand for commodities, as reported by The Economic Times. The meeting between the leaders of Australia's key trading partners is seen as a test for risk appetite in the resource-heavy bourse, with any thaw in relations likely to buoy miners, while renewed friction could deepen concerns over tariffs, inflation and global growth. This geopolitical backdrop continues to influence market sentiment and sectoral performance across the region.
Consumer stocks slid 1.9% to a four-month low, led by supermarket chain Coles, which dropped 2.2% after a court ruled it misled shoppers on discounts, according to The Economic Times. Larger rival Woolworths, also facing a similar lawsuit, dropped 1.3%. Miners slid 0.1%, led by declines in rare earth miners Lynas and Arafura which slipped 9.8% and 9.5% respectively. Critical metal miners have benefitted from Washington's push to diversify critical mineral supply chains away from top producer China.
The latest session's positive candlestick pattern suggests renewed buying interest and improving market sentiment, though technical indicators remain cautious. The index's position below its 21-day SMA indicates that near-term upside momentum remains capped, with any decisive break above this level potentially triggering a more sustained recovery. Holding above the 8,590.60 support level would help stabilize the market and preserve the broader short-term uptrend, while a break below this level would weaken the technical structure and increase the risk of a deeper corrective phase with elevated volatility. The benchmark had shed nearly 2.8% over four consecutive sessions before Thursday's modest recovery. However, CommSec's James Gruber suggests the Australian share market is expected to fall further despite overnight US gains, indicating potential headwinds ahead.
