Wall Street closed lower for a second day on Wednesday as a spike in treasury yields prompted investors to sell equities on growing fears that a new US budget bill would place even more pressure on the country’s already large deficit. The S&P500 fell 1.61%, the Nasdaq lost 1.41% and the Dow Jones ended the day down 1.91%. 

Across the European region on Wednesday, markets closed mixed as hotter-than-expected inflation out of the UK and a slew of corporate earnings results weighed on investor sentiment. The STOXX 600 fell 0.3%, Germany’s DAX lost 0.2%, the French CAC slipped 0.3% and, in the UK, the FTSE100 ended the day down 0.2%. UK inflation data for April came in at a rise to 3.5%, topping expectations of a rise to 3.3%, which slashes hopes of a rate cut in the near term.

Across the Asia region on Wednesday markets closed mostly higher led by South Korea’s Kospi Index rising 0.91%, while China’s CSI index rose 0.47%, and Hong Kong’s Hang Seng gained 0.62%, but Japan’s Nikkei ended the day down 0.61%. 

 Locally on Wednesday, the ASX200 posted a 0.52% gain as investor optimism carried from the prior day and multiple factors boosted the local market. 

Investor sentiment was driven by the RBA’s rate cut in Australia and outlook for more policy easing in months to come and, on a global scale, by China and the US making progress on the tariff negotiations front. Bond yields are also falling which drives investor appetite for equities and a rise in commodities fuelled investor appetite for materials and energy stocks yesterday so broadly it was a great day on the market. 

Nine of the 11 sectors ended today’s session in the green led by energy and healthcare sectors rising around 1% each.

 Mayne Pharma shares tumbled near 30% on Wednesday amid uncertainty over the Cosette takeover offer. Cosette, a US pharmaceutical giant now believes there has been a material adverse change in the company’s financial performance since the offer was first made in February including Mayne issuing weaker-than-expected earnings guidance and disclosed a potential US regulatory issue regarding its contraceptive pill.

 What to watch today:

• On the commodities front this morning, oil is trading 1.33% lower at US$61.21/barrel, gold is up 0.81% at US$3317.30/ounce and iron ore is flat at US$100.05/tonne. 
• The Aussie dollar has further strengthened against the greenback to buy 64.34 US cents, 92.67 Japanese Yen, 48.01 British Pence and 1 New Zealand dollar and 8 cents. 
• Ahead of Thursday’s trading session the SPI futures are anticipating the ASX 200 will open the day down almost 1% tracking Wall Street’s slide overnight.

 Trading ideas:

• Bell Potter has raised the 12-month price target on Catapult Group (ASX:CAT) from $4.40 to $5.00 and maintain a hold rating on the sports tracking and data technology company following the release of the company’s results yesterday including revenue and gross profits for FY25 modestly ahead of BP expectations, as well as free cash flow of US$8.6m which was a positive surprise. 
• And Trading Central has identified a bearish signal on Sims (ASX:SGM) following the formation of a pattern over a period of 41-days which is roughly the same amount of time the share price may fall from the close of $15.42 to the range of $11.60 to $12.30 according to standard principles of technical analysis.