On Wednesday, Australia’s primary sharemarket closed in negative territory, weighed down by growing investor anxiety over cooling economic growth and a shrinking mortgage market, even as the nation’s largest lender Commonwealth Bank (CBA) delivered annual earnings that handily beat analyst projections.
The benchmark ASX 200 index retreated 41.20 points, or 0.45%, to end the trading session at 9209.40, while the broader All Ordinaries index fell 39 points, or 0.41%, to settle at 9404.70. The Australian dollar also edged slightly lower, closing at 70.57 US cents. Across the 11 major market sectors, only two – utilities and technology – finished the day in positive territory, with losses in large banking stocks and consumer discretionary companies offsetting those isolated gains.
All four of Australia’s major banking groups closed the session lower. CBA shares dropped 0.69% to $172.72, while National Australia Bank fell 0.85% to $40.93, Westpac declined 0.90% to $35.37, and ANZ slid 0.60% to $36.39. Among consumer discretionary stocks, retail conglomerate Wesfarmers posted a minor 0.11% drop to $89.32, furniture retailer Harvey Norman fell 1.80% to $4.91, and appliance maker Breville Group declined 2.07% to $33.98.
CBA’s full-year results were the central focus of trading activity. The banking giant reported an annual net profit of $10.98 billion, expanding its loan and deposit portfolio and outperforming consensus market expectations. But the positive earnings print was overshadowed by cautious forward guidance from the firm: CBA revealed that mortgage demand has plummeted 15% since May 2024, and CEO Matt Comyn warned that broader Australian economic growth is cooling.
“While the Australian economy has remained resilient, supported by historically low unemployment and long-term investment, growth is slowing, with higher interest rates and inflation placing uneven pressure on household incomes and economic activity,” Comyn said in a statement accompanying the results. “Housing activity has softened from a high base as application volumes appear to have stabilised in recent weeks.”
Marc Jocum, senior investment strategist at Global X, explained that market sentiment shifted quickly after the earnings release. “CBA initially rallied after reporting stronger-than-expected earnings, a higher dividend and a robust capital ratio, but gains faded as investors focused on softer forward indicators, including a 15 per cent decline in mortgage applications since the federal budget, rising loan impairment expenses and a gradual lift in household arrears,” Jocum said. He added that broader market sentiment was also dragged down by caution ahead of key U.S. inflation data and persistent oil price volatility driven by ongoing geopolitical tensions in the Middle East.
Oil market movements also added to investor unease: international benchmark Brent Crude briefly topped $90 a barrel during trading before settling at $88 a barrel. Other notable market moves included a steep 14.31% drop in shares of employment platform Seek, which fell after the firm reported a statutory net loss of $307 million alongside a 10% rise in annual revenue to $1.2 billion. Investors fled the stock on the back of a weakened growth outlook, as slowing economic conditions have driven a decline in new job listings across the country.
In an outlier performance, financial services group Suncorp bucked the broader market trend to close 3.34% higher at $19.18, even after the firm reported a 43.66% year-on-year drop in full-year net profit to $1.027 billion on annual revenue of $16.77 billion, a 4.01% decline from the prior year.