The Australian share market extended its losses on Thursday, with the S&P/ASX 200 index falling 0.45% to 9,086.40 by mid-session, as a disappointing capital expenditure report underscored the fragility of the economic recovery. The decline was broad-based, with mining and financial stocks leading the retreat, though a handful of standout earnings results provided some counterweight.
Capex Shock Deepens Risk-Off Mood
Official data released at 11:30 AEST showed that business investment contracted by 3.6% in the June quarter, a much sharper fall than anticipated. The weakness was concentrated in equipment spending, which tumbled 8.9% quarter-on-quarter, while spending on structures managed a modest 2.1% gain. The forward-looking estimate for FY27 capital expenditure came in at A$200.7 billion, offering little reassurance to investors already wary of slowing momentum.
The capex miss adds to a growing list of macro headwinds. July's headline inflation eased to 3.5% year-on-year, down from 3.8% in June, but the trimmed-mean core rate held steady at 3.6%. That stickiness keeps the pressure on the Reserve Bank of Australia, which currently holds the cash rate at 4.35%, and sustains the elevated interest-rate environment that is compressing valuations across rate-sensitive sectors.
Earnings Season Delivers Mixed Signals
While the index was subdued, single-stock volatility remained high as the reporting season continued to deliver stark contrasts. Ramsay Health Care was the standout performer, surging 12.79% to A$49.65 after reporting underlying EBIT of A$1.162 billion, up 11.5% and roughly 7% ahead of consensus. The company's earnings per share beat estimates by 11%, and its full-year dividend of 91 cents came in 7% above expectations.
Mineral Resources also drew attention, restoring its dividend with a fully franked 83-cent final payout. The company reported FY26 revenue of A$6.5 billion, up 44%, with underlying EBITDA of A$2.6 billion and underlying net profit after tax of A$822 million. The news lifted the stock 3.74% to A$69.39, though it did little to arrest the broader slide in materials names.
On the downside, Generation Development Group plunged 13.54%, Magellan Financial dropped 10.14%, and Nine Entertainment fell 7.66%. Sigma Healthcare also declined 6.16%, reflecting the mixed reception to corporate updates across the market.
Cross-Asset Backdrop
The Australian dollar was trading at 0.7179 against the US dollar, while the 10-year government bond yield sat at 5.08%, near recent highs. Iron ore futures were little changed at US$95.58 per tonne, and gold and copper shares came under pressure as commodity prices softened.
Investors now turn their attention to the household spending data due later in the session and the RBA Bulletin, which is scheduled for release alongside the Payments System Board meeting. The reaction to these data points will likely set the tone for the afternoon session, with the market watching the 9,080–9,100 support zone on the ASX 200.
Analysts remain cautious, noting that while earnings beats have broadened beyond defensive sectors, the combination of high bond yields, sticky core inflation, and soft investment data could keep a lid on any sustained rally. The mining sector, in particular, faces headwinds from weaker commodity prices, even as companies like MinRes and IGO restore shareholder returns.
As the reporting season winds down, the focus shifts to macro data and the central bank's policy path. With the RBA holding rates steady and core inflation proving resilient, the market is likely to remain range-bound in the near term, with selective stock picking the key to outperformance.
