Australian Stocks Fall as Miners and Energy Drag ASX 200 Lower, Nick Scali Plunges 16% on Profit Warning

SYDNEY — Australian shares fell Thursday as losses in mining and energy stocks outweighed a strong night on Wall Street. Furniture retailer Nick Scali plunged after warning of a sharp drop in profit.

The benchmark S&P/ASX 200 index fell 38.1 points, or 0.43%, to close at 8,793.2. It had risen 0.15% to 8,831.3 on Wednesday.

Declining stocks outnumbered gainers 585 to 435, with 359 unchanged. The S&P/ASX 200 VIX, which measures expected market volatility, rose 4.67% to 11.15.

The index opened down 0.4% at 8,798 and stayed lower all day. The Australian dollar slipped 0.1% to 70.22 U.S. cents.

Wall Street gains fail to carry over

U.S. stocks rose overnight after strong results from SpaceX revived enthusiasm for artificial intelligence. The S&P 500 gained 0.6%, the Nasdaq rose about 1% and the Dow Jones Industrial Average added 0.7%. Chipmakers rose about 2%.

After the U.S. close, Tesla reported better-than-expected profit, and Meta Platforms raised its capital spending forecast to fund its AI expansion.

Those gains did not help the Australian market much, because local investors focused on weaker results and outlooks from major resource companies.

Energy stocks slide

Energy was the worst-performing sector. The S&P/ASX 200 Energy index fell about 2.2% by early afternoon.

Woodside Energy fell more than 3% during the session.

Santos, the country's second-biggest independent oil and gas producer, also fell. It reported record September-quarter production of 26.3 million barrels of oil equivalent and record free cash flow of about $1.07 billion. But it narrowed its 2026 production forecast to 99 million to 102 million barrels of oil equivalent, from 99 million to 105 million, after weather and pipeline problems at its Pikka oil project in Alaska.

Karoon Energy fell about 2.6% in early trading. Its quarterly production more than doubled, but an electrical fault at a key well in Brazil cut current output.

The decline came even as oil prices stayed high. Brent crude hovered near five-month highs around $110 a barrel after deadly attacks on a Saudi oil field and airport increased fears of supply disruptions in the Middle East.

Miners fall for a third day

Mining stocks fell for a third straight session. The S&P/ASX 200 Materials index was down 1.6% by early afternoon, and BHP and Rio Tinto each fell more than 1%.

Fortescue was among the biggest losers, falling more than 4% at one point. The iron ore producer warned that its stalled price talks with China Mineral Resources Group, the state-backed iron ore buyer, are leaving cargoes unsold.

Fortescue said September-quarter sales of 42.9 million metric tons were 3.9 million tons short of shipments because of the talks. It expects inventory to build by another 4 million to 5 million tons in October. The company kept its full-year shipment forecast of 197 million to 207 million tons but said production could be adjusted if no deal is reached by year-end.

Its costs also rose. Fortescue said hematite cash costs climbed 21% from a year earlier to $21.98 per wet metric ton, above the top of its full-year guidance.

Nick Scali hit by profit warning

Nick Scali shares fell about 16%, their worst performance of the day, after the furniture retailer said first-half profit would drop sharply as Australian and New Zealand consumers cut back on large purchases.

The company forecast first-half underlying net profit of 28 million to 32 million Australian dollars, about 20% below analysts' expectations at the midpoint. It said September-quarter written sales orders in Australia and New Zealand fell 15% from a year earlier, while store traffic dropped about 10%.

Its U.K. business continued to grow, with orders up 29%. The company also said a cyberattack in August took core systems offline for about three weeks.

Macquarie cut its price target on the stock by 14% but kept an outperform rating, saying the problem was weaker demand rather than pressure on profit margins.

Other retailers also fell, including Harvey Norman, JB Hi-Fi and Super Retail Group. The declines reflected growing concern about household spending after the Reserve Bank of Australia raised its cash rate by a quarter point in September.

Financial stocks hit

Magellan Financial Group fell about 8%. The company, which merged with investment bank Barrenjoey, said market volatility hurt trading revenue in the September quarter. Its funds under management fell 8% to 38.0 billion Australian dollars as higher bond yields reduced the value of listed infrastructure assets and investors withdrew money.

Generation Development Group fell nearly 11% despite reporting record investment bond sales.

Property under pressure

Mirvac Group fell about 2.5%. The property developer reported a 17% quarterly drop in residential sales and a 44% drop from a year earlier. It said higher interest rates and tax changes reduced demand in New South Wales, Victoria and Queensland. Mirvac kept its full-year earnings guidance.

Some gains

Industrials were the best-performing sector, rising about 0.9%. Real estate gained about 0.8%, and telecommunications rose about 0.5%.

Brambles rose about 4.6% early in the session. Gold miners including Westgold Resources and Bellevue Gold also gained after the gold price rose overnight to about $4,134 an ounce.

Data center operator NextDC rebounded nearly 4% early in the day after falling 42% on Wednesday. On Wednesday it cut its earnings forecast after a delay to power supply for a new Melbourne data center.

Other company news

CSL said it would fight a shareholder class action filed in Victoria's Supreme Court over disclosures made before its fiscal 2026 results. The company denies any liability.

APA Group made a final investment decision on its 700 million Australian dollar Bulloo Interlink gas pipeline, backed by a five-year contract with Origin Energy.

At the ASX's annual meeting, new CEO Anthony Attia said the exchange will present a new strategy in the first half of 2027 after years of governance and technology problems.

Outlook

Despite Thursday's decline, the ASX 200 is still up for the week. Investors will be watching the conflict in the Middle East, oil prices and Fortescue's talks with China. They will also be looking for more signals on whether the RBA will raise interest rates again.