ASX 200 fell 1.3% for the week as budget tax changes hit. BHP lost 2.6% after record highs; gold miners sank. Tech rebounded. NVIDIA earnings Wednesday.
The ASX 200 closed the week at 8,630.80, down 1.3% , after the Federal Budget’s capital gains tax changes forced a rapid reprice of equity risk. The index fell in four straight sessions before Friday’s fractional 0.1% decline, with only two of 11 sectors weaker on the day. The damage was concentrated in the materials sector, which dropped 3% as copper prices lost momentum and gold slid toward US$4,600 an ounce on US inflation data that threatens to delay Federal Reserve rate cuts. The week’s selloff was not a broad panic; it was a targeted unwind of the most extended positions, triggered by the arithmetic of a higher tax on investment profits.
This rapid repricing echoed structural patterns analysed previously by AlphaScala when three-week rally snapbacks exposed structural liquidity gaps. The tax shock simply accelerated the positioning reset that was already overdue in materials.
The budget measure removes a critical after-tax return assumption. When virtually every investor faces a minimum 30% tax on gains, the discount rate applied to future equity cash flows rises. The ASX 200 repriced immediately, shedding 1.3% over the week. Friday’s small decline of 9.90 points suggests the initial valuation adjustment has passed, though the index held near the session lows.
A higher capital gains tax compresses the net return an investor requires to hold a stock. For any given pre-tax expected return, the after-tax return shrinks. To restore that required return, the pre-tax price must fall. Growth stocks and recent high-flyers took the heaviest blows because their valuations embed a larger share of future capital gains. The materials sector, which had been riding record highs for BHP Group and Rio Tinto, became the immediate pressure point.
Key insight: When tax policy changes the after-tax calculus, the market re-rates the entire equity risk premium, not just the sectors directly affected. The first stocks to fall are those with the most stretched positioning, regardless of their direct tax sensitivity.
The materials sector’s 3% weekly drop was the primary engine of the index decline. Two separate commodity moves converged. Copper prices lost their speculative heat after a blistering rally. Gold slumped toward US$4,600 as higher US inflation numbers reduced the probability of near-term rate cuts and lifted the opportunity cost of holding non-yielding bullion. This double headwind snapped the streak of record highs among the large-cap miners.
BHP Group (ASX: BHP) had printed three consecutive record highs before the week began. The stock fell 2.6% to $60.46 on Friday. The BHP stock page shows an AlphaScala Alpha Score of 74/100 (Moderate), indicating the shares were not fundamentally overbought before the pullback. The decline was a liquidity event driven by profit-taking and position reduction, not a breakdown in the underlying commodity demand thesis.
Rio Tinto (ASX: RIO) suffered a similar reversal, dropping 3.2% to $185.75 after four consecutive sessions of record highs. The speed of the unwind highlights a structural dynamic: when a stock prints multiple record highs in a row, the marginal buyer is often momentum-driven. A macro shock that forces those buyers to reduce exposure creates a vacuum on the bid side, producing outsized percentage drops even when the fundamental story is intact.
Falls in the gold sector were steeper. Evolution Mining (ASX: EVN) dropped 5.5% to $12.50. Mineral Resources (ASX: MIN) tumbled 7.7% to $64.77 after managing director Chris Ellison sold 1.75 million shares for $122.5 million in his first on-market disposal in nine years. The insider sale amplified the sector’s selloff, raising questions about whether management views the stock as fully valued at recent levels. Liontown Resources (ASX: LTR) fell 6% to $2.35, extending the lithium sector’s protracted weakness.
Risk to watch: Insider selling at a cyclical peak often marks a local top, irrespective of commodity fundamentals. A founder or long-tenured executive reducing their stake after a multi-year hold sends a signal that carries more weight than a routine diversification sale.
Technology shares staged a sharp recovery on Friday after a brutal Thursday session. Xero (ASX: XRO) rebounded 8.1% to $79.67, recovering nearly all of the 9% loss it suffered a day earlier. WiseTech Global (ASX: WTC) added 3.7% to $38.01, and Megaport (ASX: MP1) rose 2.4% to $12.88 after an impressive 28% rally on Thursday.
A macro event that forces broad-based deleveraging typically hits liquid growth names first because they are easy to exit. Once the selling pressure abates, the same liquidity attracts bargain hunters. Xero’s round-trip from -9% to +8.1% in two sessions illustrates how algorithmic and systematic strategies amplify intra-week swings in tech. The sector’s bounce confirmed that Thursday’s selling was overdone relative to the direct impact on tech earnings, yet it offered no evidence that the budget risk has been fully priced in.
Bottom line for traders: The tech rebound is a liquidity event, not a fundamental re-rating. If US bond yields continue rising ahead of the NVIDIA earnings report, the sector could face a second wave of selling that is harder to reverse.
The big banks went into a tailspin after the Budget’s clampdown on negative gearing raised fears that loan growth would evaporate. Commonwealth Bank (ASX: CBA) suffered a staggering 10.4% dive on Wednesday. On Friday, it recovered 1.9% to $159.40. ANZ (ASX: ANZ) rose 1.1% to $35.21, while Westpac (ASX: WBC) and National Australia Bank (ASX: NAB) each added a modest 0.3% to $35.84 and $36.52 respectively.
The housing measures represent a structural headwind for bank mortgage books. Negative gearing changes reduce the after-tax return on investment properties, which lowers demand for new loans and may increase refinancing activity as investors reassess their portfolios. The muted Friday bounce suggests the market is still pricing in a meaningful earnings impact that will take quarters to flow through loan growth and net interest margin data. Bank stocks are in a show-me phase until actual credit data arrives.
Away from the macro and sector themes, several company-specific moves revealed where capital is rotating. Treasury Wine Estates (ASX: TWE) rose 1.9% to $4.25 after French billionaire Olivier Goudet lifted his stake by $31 million, taking his holding to 9.04%. The insider buying contrasts sharply with the Ellison sale at Mineral Resources and signals conviction in the wine company’s turnaround.
Electro Optic Systems (ASX: EOS) added 4.1% to $8.82 as it prepares to take control of the MARSS defence technology business, which has secured €102 million ($165 million) in new orders this month from an existing Middle East customer. Vicinity Centres (ASX: VCX) rose 1.6% to $2.51 after striking a $400 million deal to acquire the Eastern Creek Quarter retail precinct in western Sydney from Frasers Property, with settlement due June 30. Ventia Services (ASX: VNT) ran up 2.2% to $6.03 after renewing a maintenance services contract with Yarra Valley Water valued at $405 million over nine years.
These moves share a common thread: defence, essential services, and assets with pricing power are attracting capital while commodity-linked and rate-sensitive sectors consolidate. The Goudet stake increase is particularly notable because it comes from a sophisticated investor with a long-term horizon, suggesting the stock’s risk-reward has improved after its prolonged decline.
The coming week will test whether the ASX can stabilise or whether the budget-induced repricing has further to run. Wednesday brings the most important event on the global calendar: NVIDIA reports its results. The NVDA stock page shows an AlphaScala Alpha Score of 71/100 (Moderate) and a current price of $235.74, up 4.39% . The Philadelphia Semiconductor Sector Index has surged 34% over the past month and 153% over the past year, pricing in extraordinary AI-driven growth. NVIDIA’s numbers and guidance will either validate that premium or trigger a sharp derating that ripples through global tech supply chains.
Domestically, unemployment figures for April will be the main data release. Reserve Bank Assistant Governor Sarah Hunt delivers a speech that traders will parse for any clues about the economic outlook and the rate path after the RBA lifted the cash rate by 25 basis points to 4.35%. The RBA board minutes from that decision will also be released, providing detail on the debate behind the hike.
A string of Australian companies report earnings, including ALS, New Hope, Elders, Catapult, Technology One, James Hardie, Goodman Group, Webjet, and Bendigo and Adelaide Bank. US earnings season continues with Home Depot, Keysight Technologies, Analog Devices, Lowe's, Intuit, Target, Hasbro, Walmart, Deere, and Ralph Lauren. US economic releases include housing starts, purchasing managers’ indices, and jobless claims.
The ASX 200 ’s ability to hold above 8,600 depends on whether NVIDIA justifies the AI premium and whether the RBA signals further tightening or a pause. A hawkish RBA combined with a disappointing NVIDIA print would create a double headwind that could push the index below the week’s lows. Conversely, a dovish RBA tone alongside strong NVIDIA guidance would give the market permission to look through the budget tax shock and refocus on earnings growth. The commodities analysis suggests copper and gold remain in structural demand trends, though near-term price action will be dictated by the US dollar and rate expectations.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.