Company Interview / What caused the Tuesday tumble?

Key points:

Market sentiment weighed down by ex-dividend trades, weak consumer and business confidence US tech strength not matched in Australia due to lack of major AI CapEx drivers Major declines in banks and miners including CBA, BHP, and Rio Tinto ANZ’s large-scale job cuts prompt questions on past employment strategy and forward direction Murdoch family trust restructure may lift uncertainty from News Corp

Australian shares continue to struggle as global and local factors converge, according to Marcus Droga from Shaw and Partners. Droga attributes market weakness to several influences, notably the pullback in major stocks like Commonwealth Bank (ASX:CBA) and CSL (ASX:CSL) trading ex-dividend. Despite strength in US tech, led by Nvidia (NASDAQ:NVDA), Amazon (NASDAQ:AMZN) and Broadcom (NASDAQ:AVGO), Droga sees the ASX lacking similar AI-driven growth, leaving local markets more vulnerable to negative sentiment. Gold producers remain a bright spot, benefiting from high prices, while materials and bank sectors are feeling the pressure. BHP (ASX:BHP), Rio Tinto (ASX:RIO), and Westpac (ASX:WBC) are noted for their declines, while Fortescue Metals (ASX:FMG) manages a minor gain.

Droga points to falling business and consumer confidence, citing NAB's latest survey and Westpac’s consumer sentiment index. He observes that rising unemployment expectations add to the headwinds, with most sectors underperforming. ANZ (ASX:ANZ) is highlighted for its plan to cut 3,500 jobs, 8% of its workforce prompting market scrutiny. Droga questions the previous growth in ANZ’s headcount compared to peers NAB (ASX:NAB) and Westpac, arguing the new CEO is moving decisively to correct these imbalances.

The long-running Murdoch family trust saga also comes to a conclusion, with Lachlan Murdoch set to control a new trust holding interests in Fox Corp (NASDAQ:FOX) and News Corp (ASX:NWS). The deal is designed to settle inheritance and control matters with other siblings set to receive cash and shares, potentially reducing the overhang on News Corp.