ASX slides as Wall Street tumbles and Westpac posts $6.8b profit

For more background on how market turbulence affects domestic sectors, explore our dedicated Business coverage. On the domestic exchange, the benchmark S&P/ASX200 index shed 51.6 points, or 0.58 per cent. Meanwhile, the broader All Ordinaries dropped 48.2 points, or 0.53 per cent, settling at 8977.2. Currency markets mirrored the cautious sentiment, with the Australian dollar trading at US70.22¢, slipping from its previous close of 70.33 US cents on Friday at 5pm.

Diverging from its major sector peers, WAtoday reported that Westpac stood as the sole banking institution to post a gain during the session. Its shares climbed 1 per cent following the release of its full-year financial results. The lending institution revealed a full-year profit of $6.8 billion, representing a 1 per cent decline compared to the preceding year. Westpac leadership cautioned that interest rates are likely to remain elevated well into 2027, adding that residential property values could drop by as much as 11 per cent by March. The bank's net interest margin contracted by 3 percentage points down to 1.86 per cent for the final half of the year, driven by fierce lending competition and an increase in customer accounts qualifying for savings bonus rates. In contrast, the Commonwealth Bank, National Australia Bank, and ANZ all concluded the trading day in negative territory.

Corporate dealmaking provided bright spots away from the banking sector. Shares in KMD Brands, the parent company of outdoor labels Kathmandu and Rip Curl, surged 10.37 per cent to reach $1.65. The rally followed disclosures that the retailer entered into an exclusivity agreement with US-based global retail conglomerate Bluestar Alliance regarding a potential takeover proposal to acquire all outstanding shares. The company noted that while it received multiple external approaches, no binding proposal has been finalized.

Commodities faced broad downward momentum. Major mining houses retreated as BHP slipped 1.42 per cent, Rio Tinto dropped 1.17 per cent, and Fortescue remained stable. Gold miners experienced steeper declines as spot gold prices slipped below $US4000 per tonne, pulling Northern Star down by 4.75 per cent and Evolution Mining by 1.7 per cent. Energy markets similarly encountered headwinds. Brent crude contracted by 1.7 per cent to roughly $US111.60 per barrel early Monday as market participants evaluated geopolitical tensions involving potential US military action against Iran and threats to Middle Eastern supply routes. These movements coincided with decisions from major OPEC+ nations to maintain existing oil production quotas through December.

Domestic technology equities proved relatively insulated from the severe sell-offs seen abroad. Local tech darlings WiseTech, Xero, and TechnologyOne each surrendered less than 1 per cent of their respective valuations.

The domestic resilience contrasted sharply with Wall Street's steep losses late last week. On Friday, the S&P 500 tumbled 1.8 per cent, notching its worst single-day performance since June and wrapping up its third consecutive losing week. The Nasdaq composite led the downward slide with a 2.9 per cent drop, while the Dow Jones Industrial Average fell 572 points, or 1.1 per cent. Analysts attribute the correction to mounting scepticism surrounding artificial intelligence investments. Investors are increasingly questioning whether the hundreds of billions of dollars channeled into AI infrastructure will yield adequate productivity gains and profitability.

Market observers note a distinct shift in investor sentiment regarding emerging technologies. We’re moving out of the hopes and dreams phase of the AI trade and into the show me phase, said Joe Tigay, portfolio manager at Equity Armor Investments, in a note to investors.

Semiconductor equities bore the brunt of the correction. Nvidia shares dropped 4.2 per cent, exerting the heaviest downward pressure on the S&P 500. Meanwhile, Intel shares plummeted 28.6 per cent, marking its most severe single-session drop since 1974 amid growing concerns that high interest rates might hinder the expansion of energy-intensive data centres. Despite the correction, US indexes remain roughly 3.1 per cent below historical peaks, though political uncertainties ahead of the US midterm elections have amplified market anxiety.

Concurrently, the cryptocurrency sector absorbed severe shocks following a major security breach affecting the world's largest digital asset platform. Bitcoin prices retreated below $US77,000, down from heights exceeding $US86,000 earlier in the month. Blockchain intelligence investigators indicated that a North Korean state-backed unit likely orchestrated the attack, which compromised more than $US6 billion in digital assets on Binance. In the immediate aftermath of resuming operations, Binance users withdrew $US3.64 billion—representing 2.1 per cent of the platform's total assets. Exchange operators subsequently reported that withdrawals were beginning to stabilize while deposit volumes remained substantial, adding that reserves had successfully covered 95 per cent of the stolen funds. Cryptocurrency equities sustained heavy losses alongside the hack, with Coinbase Global shedding 10.6 per cent and Strategy dropping 7.8 per cent despite both companies reporting quarterly earnings that exceeded analyst expectations.

What to Watch Next

• Monitoring upcoming domestic retail inflation data and the expected interest rate announcement from the Reserve Bank of Australia.
• Tracking developments in the KMD Brands and Bluestar Alliance exclusivity talks for any binding acquisition proposals.
• Observing subsequent liquidity flows and security updates across major cryptocurrency exchanges following the Binance platform restoration.
• Assessing upcoming US corporate earnings releases and midterm election results for broader impacts on global equity sentiment.