Source : the age
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket gained further ground on Thursday, extending a global sharemarket rally that started after President Donald Trump appeared to tone down his criticism of the US Federal Reserve and softened his tough talk on the trade war against China.
The S&P/ASX 200 closed up 47.7 points, or 0.6 per cent, to 7968.2. Eight of the 11 industry sector finished in the green, with miners, the big banks and healthcare stocks driving gains. The Australian dollar was trading at US63.67¢ as of 4.40pm AEST.
Wall Street had another strong session overnight.Credit: Bloomberg
It’s the ASX’s last trading session this week, with the exchange closed on Friday for Anzac Day. The local market rose 1.3 per cent on Wednesday after Trump said he had no intention to fire the Fed’s chair and that his 145 per cent tariffs on China imports would end up being much lower.
The lifters
Goldminer Newmont jumped 4.5 per cent despite posting its highest quarterly costs in at least nine years as gold rebounded from a steep but brief decline following Trump’s more conciliatory tone. Bullion this week surged past $US3500 an ounce for the first time as Trump’s tariff agenda and geopolitical tensions prompted investors to seek safe assets.
Uranium miner Paladin Energy had another stellar day, rising another 12 per cent after blowing the lights out in Wednesday’s session with a 24.6 per cent jump.
The iron ore giants also performed well – BHP gained 0.9 per cent, while Fortescue and Rio Tinto both added 1 per cent. The results come amid expectations that America’s tariffs on China won’t be as punitive as initially flagged and become less damaging for Australia’s biggest export market.
The big four banks also ended the session in positive territory, with Commonwealth Bank – the largest stock on the ASX – up 0.6 per cent, Westpac adding 1.1 per cent, NAB rising 0.6 per cent and ANZ up 1.6 per cent.
Dual-listed sleep device maker ResMed soared by 8.5 per cent after it reported an 8 per cent increase in revenue to $US1.3 billion ($2 trillion) for the third quarter and told investors that it was not exposed to Trump’s trade tariffs.
ResMed produces devices used to treat sleep apnoea.Credit: Bloomberg
The IT sector also closed in the green following a positive lead from Wall Street, with local tech giant WiseTech Global up 2.5 per cent. Accounting software firm Xero, which started the day well, slipped into the red to close 0.6 per cent weaker.
The laggards
The energy sector fell 0.7 per cent as oil prices softened overnight, with Woodside (down 2 per cent) and Santos (down 1.2 per cent) both taking hits. Consumer staples fell 0.5 per cent, with supermarket giants Coles down 1.2 per cent and Woolworths down 0.4 per cent.
The lowdown
Senior sales trader with Saxo Asia Pacific Junvum Kim said the Australian market was nearing the “psychological 8000 mark” on Thursday.
“[It’s] following positive leads from US markets amid optimism over reduced trade tensions,” Kim said.
“Financial and mining stocks were the primary contributors to the gains during this shortened holiday week, but volatility is expected to remain as the US continues its quarterly earnings season, with most of the ‘magnificent 7’ tech stocks reporting next week.”
Wall Street notched up a solid session on Wednesday. The S&P 500 climbed 1.7 per cent, while the Dow Jones Industrial Average added 1.1 per cent and the Nasdaq composite rose 2.5 per cent. The US market’s latest move was up in part because Trump’s softened stance on Jerome Powell. Trump had been angry with the central bank chief, whom he had called “a major loser” because of the Fed’s hesitance to cut interest rates.
While cutting rates could give the economy a boost, it could also put upward pressure on inflation. Economists say Trump’s tariffs are probably both to slow the economy and to raise inflation, at least briefly.
US President Donald Trump outside the White House on Wednesday.Credit: Bloomberg
Trump’s tough talk had frightened investors because the Fed is supposed to act independently, without pressure from politicians, so that it can make decisions that may be painful in the short term but are best for the long term.
Markets also rose after Trump said that US tariffs on imports coming from China could come down “substantially” from the current 145 per cent. “It won’t be that high, not going to be that high,” Trump said.
The hope along Wall Street has been that Trump would lower his tariffs after negotiating trade deals with other countries, and Trump said he would be “very nice” to the world’s second-largest economy and not play hardball with Chinese President Xi Jinping.
If Trump brings his tariffs down by enough, investors believe a recession could be averted.
US businesses say they’re already feeling the effects of the trade war. A preliminary reading of US business activity fell to a 16-month low, as the threat of tariffs helped push up prices charged for goods and services at the sharpest rate for just over a year, according to S&P Global’s latest survey released this week.
The S&P 500 remains more than 12 per cent below its record set this year after briefly dropping roughly 20 per cent below the mark. The swings for markets have also been coming hour to hour, not just day to day, as Trump and officials in his administration continue to surprise investors. On Wednesday alone, the S&P 500 charged to a 3.5 per cent gain in the morning, only to more than halve that gain as the day progressed.
Trump’s latest comments had a relaxing effect on the bond market, where US Treasury yields eased. It’s a turnaround from earlier this month, when spiking Treasury yields raised fears that Trump’s actions were scaring investors away from US investments and weakening the US bond market’s reputation as one of the safest places to keep cash.
On Wall Street, big tech helped lead stock indexes higher.
Nvidia rose 4.3 per cent to claw back more of the sharp losses it took last week, when it said US restrictions on exports of its H20 chips to China could hurt its first-quarter results by $US5.5 billion ($8.6 billion). The chipmaker’s stock was the strongest single force lifting the S&P 500.
Tesla revved 7.5 per cent higher after CEO Elon Musk said he would spend less time in Washington and more time running his electric vehicle company, which reported a 71 per cent plunge in quarterly profits. It’s been struggling because of backlash against Musk’s efforts to lead cost-cutting efforts by the US government.
In other international markets, indexes jumped 2.1 per cent in France, 2.4 per cent in Hong Kong and 1.9 per cent in Japan. Stocks in Shanghai were an exception, dipping 0.1 per cent.
Tweet of the day
Quote of the day
The Musk-mobiles are now kryptonite to Tesla’s erstwhile legions of progressive fans, and the company knows it.
Elizabeth Knight
That’s business columnist Elizabeth Knight on Tesla’s first quarter earning reports. You can read more of her piece here.
AP, with staff writers.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
