The Australian sharemarket displayed resilience on Tuesday despite a sharp decline in the US tech sector overnight, triggered by the emergence of a powerful Chinese AI startup. While the ASX200 recovered from initial losses, investor sentiment remained cautious as the ripple effects of Wall Street's turmoil continued to be felt.
The Australian sharemarket remained relatively stable on Tuesday, despite a significant downturn in Wall Street 's tech sector overnight. Investor concerns over a powerful Chinese artificial intelligence startup, DeepSeek, triggered a sell-off in American tech giants, erasing billions from the market capitalization of companies like Nvidia . The S&P/ ASX200 initially slipped below 8400 points but recovered to close with a modest gain of 5 points, or 0.1 percent, at 8,413.9 points.
Five out of the 11 industry sectors saw growth, led by retailers, communication services, and banks. However, real estate investment trusts were the biggest losers, dropping 2.5 percent. Energy and tech sectors also retreated, declining 1.8 percent and 1 percent respectively.The Australian dollar experienced slight losses, trading at 62.6 US cents by 1.29pm AEDT. On Wall Street, DeepSeek's unveiling of a large AI language model capable of competing with US counterparts at a fraction of the cost sent shockwaves through the tech sector. Nvidia's stock plummeted over 17 percent, wiping out approximately $US600 billion from its market capitalization. This marked the stock's largest single-day drop since March 2020 and the biggest one-day loss by a company in US sharemarket history. The uncertainty stemming from Wall Street reverberated through the Australian tech sector, with data centre operator NextDC leading the decline, dropping sharply by 6.2 percent. WiseTech Global and family app Life360 also experienced losses of 1.1 percent and 3 percent respectively. Real estate investment trusts, particularly data centre owner Goodman Group, declined by 8 percent. Meanwhile, energy stocks weakened following a 1.7 percent drop in oil prices on Monday due to US President Donald Trump's threat to impose tariffs on key industrial commodities like steel, aluminium, and copper. Uranium producers Deep Yellow and Paladin Energy posted significant losses of around 17.5 percent and 11 percent respectively. Pharma giant Sigma Healthcare emerged as the top performer with a gain of 11.5 percent, following its merger partner Chemist Warehouse's announcement of a 13 percent surge in first-half sales to a record $5.15 billion.
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