The S&P/ASX 200 declined for a third straight session on Tuesday, slipping 31.1 points, or 0.36%, to close at 8,670.7. The broader S&P/ASX 300 saw decliners outpace advancers 200 to 86, reflecting cautious positioning ahead of the federal budget announcement.
Budget Anticipation Weighs on Banks
Treasurer Jim Chalmers was scheduled to deliver the budget at 19:30 AEST, with Treasury figures showing the budget bottom line A$44.9 billion ahead of December forecasts. Market participants expect the budget to address capital gains tax discounts and negative gearing, potentially impacting property investor demand. Bank stocks led the decline, with ANZ and National Australia Bank each falling 2.1%, while Commonwealth Bank and Westpac shed 1.4% each. According to Market Index, property investors accounted for roughly 40% of mortgage applications in 2025, making any policy tweaks highly consequential for the sector.
Tech Sector Hit Hard
The information technology sector dropped 3.4%, driven by sharp declines in key names. Life360 plunged 10.9% to A$17.92 after the company trimmed its user-growth outlook, citing a third-party anti-fraud tool that mistakenly flagged real users and slowed new signups. Despite first-quarter revenue climbing 38% to US$143.1 million and management raising 2026 guidance to US$650 million–US$685 million, investors focused on the weaker user growth. WiseTech Global fell 5.9%, and SiteMinder gave up 6.0%.
DroneShield Slides on ASIC Probe
DroneShield shares dropped 9.9% to A$3.18 after the company disclosed that ASIC had requested assistance in a probe related to ASX announcements from November 1 to November 20 and trading activity between November 6 and November 12. Management noted it was not clear whether any action would result. The stock touched an intraday low of A$2.95 before closing, though it remains well above year-ago levels but far from its October high.
Miners Rally on Copper Record
The materials sector surged 2.4% as COMEX copper futures hit an all-time high, closing above US$6.45 a pound overnight before easing in Asian trading. BHP advanced 2.5%, reclaiming the ASX's top spot by market value. Rio Tinto jumped 3.1%, South32 added 3.6%, and Sandfire Resources finished 3.1% higher.
Macro Data Disappoints
NAB's business confidence survey remained unchanged at -24 for April, with purchase costs jumping 4.5% for the quarter and retail price growth hitting 3.2%. NAB economist Michael Hayes noted that rising prices and margin pressure are starting to bite, impacting activity and investment measures. Oil prices held above US$105 a barrel, with Middle East tensions fueling inflation concerns.
Technical Outlook and Rate Risks
The ASX 200 has hovered around its 200-day moving average at 8,804 for five weeks, with support at 8,620–8,600 and resistance at 9,020–9,030. The Reserve Bank of Australia raised its cash rate to 4.35% last week, the third increase this year, flagging persistent inflation risks from the Middle East oil shock. HSBC's Paul Bloxham warned that expansionary fiscal policy could force further RBA hikes, increasing recession risks.
Commonwealth Bank is set to report results on Wednesday, with investors focusing on margins, arrears, and credit appetite. After ANZ beat estimates but NAB and Westpac disappointed, the CBA update could determine whether the 8,600 support level holds.
