分类： business

On a trading day that saw broad-based growth across nearly all Australian market segments, a sharp downturn among the nation’s four largest lenders dragged the country’s benchmark ASX 200 into negative territory, with the Commonwealth Bank of Australia (CBA) posting its worst single-day performance in recent history. The Wednesday session closed with the ASX 200 down 40.30 points, or 0.46%, settling at 8630.40, while the broader All Ordinaries index slipped 0.32% to 8880.70, a drop of 28.90 points. Against this market shift, the Australian dollar strengthened slightly to trade at 72.38 U.S. cents. Notably, 10 of the 11 tracked market sectors closed the session in positive territory, making the overall index decline almost entirely attributable to the selloff in major financial stocks. The financial sector as a whole fell more than 4% following CBA’s release of its quarterly earnings and updated outlook, which spooked investor sentiment across the entire banking industry. CBA shares plummeted 10.43% to close at $153.67, erasing more than $25 billion from the bank’s total market capitalization in a single session. The lender reported a March quarter net profit of $2.7 billion, but what caught investor attention was its announcement of a $200 million increase in bad debt provisions. The bank cited mounting budgetary pressure on Australian households and businesses, amplified by geopolitical instability tied to the Israel-Iran regional conflict. Industry analysts say the move signals a growing cautious outlook across Australia’s major banking sector, as early signs of financial stress begin to emerge among consumers. “We are starting to see early signs of stress emerge more broadly,” explained Cameron McCormack, senior portfolio manager at global investment firm VanEck. “Arrears are edging higher across personal loans, home loans and credit cards, while total provisioning across the big four has risen to $6.5 billion. Importantly, this is not isolated to CBA. Provisioning has been stepping up across the major banks this reporting season, which is consistent with the cumulative impact of restrictive monetary policy beginning to bite.” McCormack added that persistent high inflation and a resilient labour market have created a dual pressure that is squeezing bank profits from both sides. “On the demand side, higher interest rates are weighing on consumers and slowing credit growth,” he said. “On the supply side, intense competition is limiting the ability for banks to reprice loans. As a result, net interest margins are increasingly being squeezed.” The market selloff triggered by CBA’s results pulled down the other three major Australian banks alongside it. Westpac closed down 2.84% at $35.57, the National Australia Bank (NAB) fell 1.50% to $36.86, and Australia and New Zealand Banking Group (ANZ) dropped 1.62% to $34.57. Outside the financial sector, strong gains in consumer discretionary stocks and mining shares helped offset much of the sector’s losses. Consumer conglomerate Wesfarmers added 0.35% to close at $71.55, while gaming firm Aristocrat Leisure surged 13.28% to $51.94 after reporting a robust first-half earnings report: normalised revenue hit $3.03 billion for the six months ending March 31, while net profit jumped to $725 million. Australia’s big three iron ore miners also posted solid gains. BHP closed up 2.91% at $61.52, Rio Tinto gained 1.93% to settle at $189, and Fortescue Metals climbed 2.78% to $22.52. A handful of other individual companies posted notable losses in Wednesday’s session. Buy now, pay later provider Zip fell 0.8% to $2.44 after Australia’s High Court ordered the firm to rebrand in the country over a successful trademark dispute. Pathology and medical diagnostics firm Healius plummeted 22.68% to $0.375 after it downgraded its full-year earnings guidance and announced the sale of its Agilex Biolabs subsidiary. Online furniture retailer Temple and Webster also slid 6.39% to $4.98 after it forecast underlying earnings of only $20 million to $22 million for the 2026 financial year, missing earlier market expectations.

Australia’s recently unveiled federal budget has left many financially squeezed mortgage holders bracing for steeper home loan repayments, with leading economists warning the document fails to rein in excessive government spending, tame persistent inflation, or ease pressure on the Reserve Bank of Australia (RBA) to implement additional monetary tightening. The outcome has put already overstretched household budgets at further risk, as global energy market volatility driven by Middle East tensions between the U.S. and Iran continues to push up fuel and broader living costs.

AMP’s chief economist Shane Oliver, one of the most widely followed experts on Australian monetary and fiscal policy, sounded the alarm over the budget’s structural trajectory, noting that it locks in elevated public spending and ongoing budget deficits over the medium term. In comments to Australian NewsWire, Oliver explained that the budget even includes minor near-term stimulus measures that could add marginal upward pressure on inflation, which remains above the RBA’s target range. “It’s not huge but it certainly doesn’t make the Reserve Bank’s job any easier,” he said. Prior to the release of Treasurer Jim Chalmers’ fifth budget on Tuesday, Oliver had already predicted the RBA would implement another interest rate hike in August. The budget’s lack of meaningful fiscal contraction has not changed that forecast, he confirmed.

David Bassanese, chief economist at leading investment firm Betashares, echoed Oliver’s assessment. While he noted the budget does not dramatically worsen near-term inflation risks, it also fails to deliver the fiscal restraint needed to reduce the RBA’s burden of further policy tightening if inflation remains stubborn. “The Budget is hardly super restrictive either, so does not lessen the burden on the RBA to tighten policy further if need be,” Bassanese said.

On a more positive note, economists did acknowledge that the federal government resisted widespread political pressure to roll out broad, untargeted relief for households struggling with rising cost of living — a move that Oliver said would have been a catastrophic mistake for long-term inflation and interest rates. Many state Australian budgets have rolled out broad household relief in recent months, but the federal government held back from large-scale across-the-board support even as mortgage and energy costs climb. Oliver noted that broad-based relief would have added significantly to inflation, ultimately forcing bigger rate hikes that would leave mortgage holders worse off over time. “The temptation would have been to do more – like some of the state budgets – that would have been disastrous,” he said. “It was good to see the government holding back, I think we needed to see more of a cut back in the near term.”

Oliver added that any government support should be targeted exclusively at the most vulnerable households, rather than distributed to all Australians regardless of income. Untargeted universal relief is unnecessarily costly and adds unnecessary inflationary pressure, he argued. That pressure is already being amplified by a sharp rally in global crude oil prices, which have surged from roughly $US56 per barrel to briefly touch $US131 per barrel amid Middle East supply fears, driving up fuel prices across Australia. Industry calculations show every $US10 per barrel increase in crude adds 10 Australian cents per liter to retail fuel prices, stretching household transport budgets further. Official budget forecasts project oil prices will remain above $US100 per barrel before easing to $US80 per barrel next year.

Along with inflation and interest rate risks, the budget also reveals a steep upward trajectory for Australia’s national gross debt over the coming decade. Current data from the Australian Office of Financial Management puts gross national debt at $964.2 billion at present. Treasury projections show debt will rise every year over the next four years, hitting $982 billion by the 2026 financial year, crossing the $1 trillion mark in mid-2026, rising to $1.051 trillion in 2027, $1.12 trillion in 2028, and peaking at $1.249 trillion, equal to 35.6% of national GDP. After hitting that peak, debt is projected to gradually decline, falling back to 27.2% of GDP by 2037 as the country begins paying down accumulated obligations.

Oliver argued that Australia needs far more aggressive fiscal consolidation to get public spending back to sustainable pre-pandemic levels, which would ease pressure on the RBA, reduce inflation, and free up economic capacity for private sector growth. He estimates the government needs to cut roughly $100 billion in cumulative spending over the next four years to bring public spending down to 25% of GDP, a level that prevailed before the COVID-19 pandemic. “If you did that it would take us back to levels that prevailed prior to covid and free up capacity for stronger private sector activity and allow for lower interest rates without generating inflation,” he explained. “We saw only a small share of that in Tuesday’s budget.”

On Wednesday, most major equity markets across Asia closed in negative territory, as investors reacted to two interconnected sources of market uncertainty: a stalled diplomatic breakthrough between the United States and Iran that threatens regional peace, and fresh disruptions that have cooled the red-hot global artificial intelligence boom.

Tensions between Washington and Tehran have reached a new impasse in recent days, with both sides refusing to budge on negotiating positions and issuing repeated threats to end their current ceasefire. On Tuesday, Iran’s top negotiator stated that the US must accept Tehran’s latest peace proposal, or talks will collapse entirely. This comment came hours after former US President Donald Trump warned that the existing truce in the Middle East was on the verge of breaking down. While neither side has signaled a willingness to return to full-scale open conflict, the deadlock has spooked global investors already jittery about the impact of regional tension on energy supplies.

All eyes are now turning to Beijing, where Trump is scheduled to land Wednesday for his first visit to China in almost a decade. The former president has already indicated that Iran will top the agenda for his expected extended talks with Chinese President Xi Jinping, leaving markets waiting for any potential diplomatic breakthrough that could ease regional tension.

Across Asian trading hubs, the bearish sentiment was widespread on Wednesday. Benchmark indices in Hong Kong, Shanghai, Taipei, Sydney, Bangkok, Manila and Kuala Lumpur all closed lower. Indonesia’s benchmark index tumbled nearly two percent, as the national currency rupiah plunged to an all-time low against the US dollar.

The US-Iran standoff had already sent global energy costs soaring, after commercial traffic through the Strait of Hormuz — a critical chokepoint that carries roughly one-fifth of the world’s total global oil supplies — came to a near-complete halt. Oddly, oil prices actually edged lower in early Asian trading on Wednesday: international benchmark Brent crude fell 0.6 percent to trade at $107.13 per barrel, while US benchmark West Texas Intermediate dropped 0.5 percent to settle at $101.63 a barrel.

Beyond Middle East tensions, a fresh wave of headwinds hit the global AI sector, adding further pressure to Asian markets. In South Korea, Seoul’s Kospi index — which is heavily weighted toward technology and AI firms — plunged five percent on Tuesday after a senior government official proposed a new social tax on AI profits, paired with a national dividend program to redistribute excess corporate gains from the technology. The index showed mild recovery on Wednesday after the presidential Blue House distanced itself from the proposal, but fresh trouble soon emerged for the country’s AI ambitions.

Samsung Electronics, the world’s leading producer of advanced semiconductors that power everything from AI systems to consumer electronics, saw its shares drop as much as 6.1 percent after negotiations between the firm and its largest labor union collapsed, Bloomberg reported. The union has threatened to launch a full strike, a move that industry analysts warn could cause severe supply chain disruptions and major financial losses across the global tech sector. South Korea has made becoming one of the world’s top three AI powers — alongside the US and China — a core national goal, and is set to triple its public AI investment this year, making current setbacks all the more damaging for market confidence.

Adding to global economic uncertainty, new US consumer price index data released on Tuesday confirmed that soaring energy costs are continuing to stoke inflation, with the index hitting a three-year high in April. The data reinforces investor concerns that sticky inflation could force central banks to keep interest rates higher for longer, a move that would further pressure equity valuations.

Investors are also turning their attention to earnings results from China’s two largest technology giants, Alibaba and Tencent, which are set to release their latest financial reports this week. Both firms have poured billions of dollars into AI development in recent years: e-commerce giant Alibaba is the developer of the widely used open-source Qwen large language model, popular among independent programmers, while gaming and social media conglomerate Tencent launched its own foundational AI model in 2023 and a public-facing chatbot in 2024. Despite their heavy investment, both firms have seen weak share performance in recent months, as they struggle to keep pace with breakthroughs from leading US AI competitors.

Across major global markets, the mixed picture continued through the early GMT trading window. On Wall Street, the Dow Jones Industrial Average closed up 0.1 percent at 49,760.56, while the S&P 500 fell 0.2 percent to 7,400.96, and the tech-heavy Nasdaq Composite dropped 0.7 percent to 26,088.2. In Europe, London’s FTSE 100 closed flat at 10,265.32, while Paris’ CAC 40 lost 1 percent to close at 7,979.92, and Frankfurt’s DAX 30 fell 1.6 percent to 23,954.92. In East Asia, Tokyo’s Nikkei 225 bucked the regional downturn to close up 0.3 percent at 62,911.46. In currency markets, the euro fell slightly to $1.1738 from Tuesday’s close of $1.1745, the pound edged up to $1.3538 from $1.3542, the dollar gained slightly against the yen to trade at 157.71 from 157.57, and the euro held steady against the pound at 86.70 pence.

Australia’s freshly unveiled federal budget, delivered on Tuesday, has emerged as a polarizing policy package, with industry leaders across technology, renewable energy, and finance clashing over its long-term economic impact. While Commonwealth Bank analysts have concluded the budget fails to meaningfully curb persistent nationwide inflation, segments of Australia’s tech and clean energy sectors argue the policy changes will unlock fresh capital and drive strategic growth across key innovative industries.

Global market volatility has already rippled through Australian financial forecasts following the budget announcement. Overnight, the Australian dollar posted minor gains against the U.S. dollar, supported in part by rising global oil prices even as higher-than-anticpected U.S. inflation readings rattled American investor confidence. Futures markets now point to a slight 0.1% dip for the ASX 200 at Wednesday’s opening bell, mirroring marginal losses recorded on Wall Street overnight.

Stakeholders in Australia’s startup and tech ecosystem have delivered sharply divergent assessments of the budget’s key business and tax adjustments. Shaun Broughton, Regional Director for Shopify across Asia Pacific and Japan, framed the policy package as a net step forward for domestic entrepreneurs. “Yesterday’s budget moves in the right direction for Australian entrepreneurs – from a permanent instant asset write-off to venture capital reform and measures that support productivity and growth,” he noted. However, Broughton cautioned that proposed adjustments to the capital gains tax discount send mixed signals to founding teams, early startup employees, and growth-focused investors. For founders who spend years building businesses from scratch, he explained, long-term incentive structures are critical, rewarding not just the risk of launching a venture but the work of scaling and sustaining long-term success.

That caution was echoed as a full-throated critique from accounting industry body CPA Australia, which argues the tax changes directly undermine the federal government’s stated goals of boosting productivity and supporting sustainable economic growth. Jenny Wong, Lead Tax Advisor at CPA Australia, emphasized that productivity growth relies on investment, particularly in high-potential areas like startups, innovation, and business expansion. “These changes make that equation harder,” Wong said. “If you’re taking a risk, building something, investing in growth, you’re handing over a significant portion of that return. That is a clear disincentive. It reduces the incentive to invest in the kinds of businesses that drive long-term productivity and job creation. For anyone looking to invest, grow a business or take on risk, the message is clear – the government will take at least 30 per cent, regardless of the outcome.”

Despite the criticism over tax adjustments, some tech leaders see meaningful progress in the budget’s commitments to advancing Australia’s artificial intelligence strategy. Charlie Farah, Field Chief Technology Officer at global analytics firm Qlik, pointed to the budget’s alignment with the National AI Plan the government unveiled last December. “The $3.5bn-plus business tax package to support risk taking and the R&D tax incentives announced in the budget will boost AI investment and are a welcomed step in the right direction for Australia becoming a global leader in AI,” Farah said. He added that growing interest in building domestic AI enterprises currently outpaces the nation’s existing skilled workforce and capabilities, calling the government’s new focus on AI a welcome move even amid the budget’s broader goal of stabilizing the national economy. Still, Farah noted, significant gaps remain: “There is still work to be done in making Australia truly AI ready and championing AI skills. As a next step, we would like to see updates to the National Skills Agreement or Digital Economy Strategy with frameworks for AI and data literacy. This way, the government is facilitating future workforce training and reskilling, making AI a national skills priority for Australian workers.”

For leaders in Australia’s renewable energy sector, the budget’s ambition to accelerate the national energy transition has drawn praise, even as questions remain over whether the policy matches ambition with sufficient investment. Jack Curtis, co-founder of Australian unicorn startup Neara – which achieved a $1 billion valuation earlier this year – said the government’s energy transition targets outlined in the budget are directionally correct. “The question is whether we’re investing equally in the solutions required to deliver it,” Curtis said. He noted that the budget includes the most sweeping reform to the National Electricity Market’s wholesale trading framework since the 1990s, paired with an expansion of the national Capacity Investment Scheme, changes that will trigger a new wave of investment in transmission and distribution infrastructure. “But the scale and pace of change raise the stakes on decision quality,” Curtis warned. “Utilities will need to make significant infrastructure calls at speed, with the margin for error narrowing as the cost of getting it wrong widens.”

On the macroeconomic side, Commonwealth Bank currency analyst Kristina Clifton said the budget delivers only a minor improvement to Australia’s fiscal position. The document outlines stable budget deficits holding around 1% of GDP over the next three years, before gradual fiscal improvement begins. “Our Aussie economics team note that the budget is unlikely to shift the RBA’s near‑term view on interest rates, but it does little to help in the fight against inflation,” Clifton said. She added that more aggressive spending restraint scheduled for 2026-27 would have reduced aggregate demand across the economy and created additional policy headroom for the Reserve Bank of Australia (RBA) if inflation remains sticky. “As it stands the risk sits with further tightening by the RBA,” Clifton said. Currently, financial markets are pricing in roughly a 20% probability that the RBA will implement another cash rate hike at its upcoming June policy meeting.

The budget announcement comes against a backdrop of persistent global economic headwinds, with rising inflation and slowing growth driven in large part by the ongoing global energy crisis. Energy supply shocks have pushed up headline inflation across all major advanced economies, with the steepest increases recorded to date in the European Union and the United States.