Source : THE AGE NEWS
Australian shares have shaken off a weak start to forge a modest gain as oil prices retreated on hopes the US and Iran are looking to de-escalate their conflict.
The S&P/ASX200 rose 42.5 points on Monday, up 0.47 per cent to 9019.3, as the broader All Ordinaries advanced 41.4 points, or 0.45 per cent, to 9178.4.
The local energy sector underperformed the broader market, dipping 1.2 per cent after oil prices fell on reports that the United States and Iran were returning to the negotiating table.
“It surprises me how many times the market has been willing to give the US grace and favour over its claims about the peace situation in the Middle East,” Moomoo Australian and NZ chief executive Michael McCarthy said.
Meanwhile, volatility on Wall Street left many investors unsure of where markets were heading next.
“It’s all over the shop, and the increasing uncertainty that’s coming with the absolutely radical movement in US shares is making investors all around the globe nervous, and Australia’s are no exception,” McCarthy said.
Eight of 11 local sectors gained during the session, with strong performances from utilities, industrials and healthcare stocks.
Mining stocks recovered from a weak start to carve a modest 0.3 per cent improvement, though Fortescue weighed heavily as iron ore futures fell to a 13-month low of less than $US94 ($134) a tonne.
Fellow mega miners BHP and Rio Tinto ended the day either side of break-even, with Rio slipping 0.6 per cent despite copper rising to its highest price since early June.
Gold stocks were mixed but broadly higher as the yellow metal firmed to $US4065 ($5783) an ounce, lifting the local sub-index 0.7 per cent.
The heavyweight financials sector also advanced, with Westpac leading three of the big four banks higher after completing the sale of its RAMS mortgage portfolio to a consortium led by Pepper Money.
Utilities stocks outperformed the market, the segment up 2.1 per cent, with strong performances from Origin and AGL as Origin continued to recover from its data breach-induced slump.
Consumer-facing segments also did well, with both staples and cyclicals improving by more than 1 per cent.
Airlines were also in favour, with Qantas and Virgin up more than 2 and 3 per cent, respectively, helping to support a 1.4 per cent lift in the industrials sector.
In company news, Vulcan Energy Resources shares jumped almost 3 per cent after it appointed former Lynas boss Amanda Lacaze to its board as an independent non-executive director.
The Australian dollar was buying US70.27¢, down from US70.33¢ on Friday at 5pm.
On Wall Street on Friday, the S&P 500 climbed 0.7 per cent after veering between gains and losses throughout the day. The Dow Jones added 276 points, or 0.5 per cent, and the Nasdaq composite rallied 1 per cent after briefly losing all of an early 1.3 per cent jump.
It’s a fitting finish to July for the US sharemarket, which lurched up and down as oil prices shot higher because of the war with Iran and worries grew about whether Big Tech’s massive investments in artificial-intelligence technology would translate into profits and whether chipmaker stocks had soared too high in the euphoria around AI.
Friday’s gains sent the S&P 500 to its first winning week in three, but the main measure of the US sharemarket nevertheless finished the month with a tiny loss.
Amazon led the market with a leap of 15.3 per cent after reporting much stronger profit for the latest quarter than analysts expected. Its profit more than tripled from a year earlier, thanks in part to an acceleration of growth in its cloud computing business.
Analysts said that could be a signal that Amazon’s huge AI investments are paying off, and Amazon increased its forecast for how much it would spend on investments this year.
The reaction was similar to what Microsoft received a day earlier, when its stock soared to its best day in nearly 18 years on signals that its AI investments may also be yielding higher profits.
Chip companies selling the processors and computer memory that such “hyperscalers” are scrambling to buy swung sharply again on Friday. Micron Technology, for example, went from an early jump of 6.4 per cent to a loss of 6.5 per cent before finishing with a fall of 5.9 per cent.
More firmly on the losing end of Wall Street was Apple, which fell 7.4 per cent despite reporting stronger profit for the latest quarter than expected. Its forecast for revenue growth in the current quarter fell short of expectations, which executives pinned on a supply crunch in components being vacuumed up in the AI boom.
AAP with AP, Bloomberg, Reuters
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