Source : THE AGE NEWS
The Australian sharemarket extended its record run on Thursday, closing at an all-time high for the second day in a row as gold miners advanced and oil held its losses amid hopes for a deal to reopen the Strait of Hormuz.
The S&P/ASX 200 finished 43.8 points, or 0.5 per cent, higher at 9271.60, topping Wednesday’s record close. Gains moderated during the session after the bourse rose as high as 9296.7 in the first hour of trade, with materials doing most of the heavy lifting. The dollar softened to US70.42¢.
Gold miners shone yet again after the price of the precious metal extended its biggest gain in six months, as signs of progress in reopening the strait eased energy-led pressure on the Federal Reserve to raise interest rates. Bullion briefly passed $US4300 an ounce, after jumping 4.1 per cent in the previous session.
Iran said it had reached agreement with Oman on a shipping route through the strait, raising the prospect of some energy flows resuming through the critical waterway. The route would remain active for “two to four months”, Iranian Deputy Foreign Minister Kazem Gharibabadi told domestic media, adding that “this understanding does not mean the full reopening” of the strait.
President Donald Trump said US negotiations with Iran were ongoing, and he would “see what happens”, adding he would prefer to make a deal with the Islamic Republic than end the war militarily. Earlier, he said a deal was possible as early as Wednesday, US time.
Local gold miners Northern Star Resources jumped 3.3 per cent, Evolution Mining climbed 3.8 per cent and Newmont was up 3.7 per cent. Meanwhile, iron ore and copper giant BHP rose 0.5 per cent and Fortescue added 1.4 per cent, while Rio Tinto closed flat.
The miners’ good fortunes were also reflected in the latest data from the Australian Bureau of Statistics, which said that Australia unexpectedly recorded a $1.9 billion trade surplus in June as the value of exports – underpinned by commodities – jumped the most in four years. Exports were worth almost $50 billion, the highest level since early 2023. More than $7 billion of that was gold, with shipments exceeding a record $40 billion for the first half of the year.
The financial sector, which accounts for a third of the ASX, also closed higher, as all big four banks held or extended their recent gains. CBA rose 0.9 per cent, National Australia Bank rose 0.4 per cent, ANZ Bank added 0.3 per cent and Westpac closed flat.
Technology stocks were mixed, taking a breather after their rally of the past sessions. Software concern WiseTech Global dropped 1.5 per cent and family-tracking app Life360 lost 3.2 per cent, while Xero and Technology One added 0.4 per cent and 0.3 per cent respectively. AI data centre operator NextDC rose 0.8 per cent.
Energy stocks were also mixed. Woodside was down 0.2 per cent, while Santos rose 0.5 per cent. Oil held its losses as Iran announced its Hormuz agreement with Oman. Brent traded near $US79 a barrel, after rising more than 1 per cent earlier in the session, while West Texas Intermediate was about $US75 after losing 11 per cent in the previous three sessions.
“US oil prices have already fallen below $US80 per barrel as the global oil market evaluates the potential of a deal with Iran,” said Rob Thummel, senior portfolio manager at Tortoise Capital. “If a deal is reached, then it is possible for oil to head towards $US70 per barrel.”
News Corp’s local shares jumped 3.4 per cent after the Murdoch media empire released its results in New York after the closing bell. The sprawling conglomerate – owner of Australian mastheads the Herald Sun, Daily Telegraph, Courier Mail and The Australian – reported earnings were up 31 per cent in the year to June 30 to $US423 million ($600 million).
Its fourth-quarter revenue of $US2.34 billion, up 11 per cent from a year ago, beat Wall Street forecasts. Information services behemoth Dow Jones remained the jewel in News Corp’s crown, but its real estate and book publishing divisions also posted strong growth.
Underlying earnings in its news division slumped by 9 per cent as print advertising sagged, the FIFA World Cup drove up broadcasting costs and the company launched a new masthead, California Post. The company lashed out at artificial intelligence companies, calling some in the AI sector “pirates” and “crass kleptomaniacs”, promising to expose their “murky, illegal behaviour”.
News singled out AI answer engines Perplexity and Brave, with which it is embroiled in ongoing legal battles, but also pledged to take the fight to “some of the world’s better-known companies” that deal with them, in a chest-beating yearly earnings report.
“Our claims against Brave focus on their data for AI products, which are legally gormlessly sourced and repurposed copyrighted material,” News Corp chief executive Robert Thomson said.
On Wall Street overnight, US stocks meandered to a mixed finish, but remained close to their records. The uncertain trading on Wall Street followed two days of big gains that gave the week and August a strong start. Several big technology companies slumped, though, ultimately weighing down the US market.
The S&P 500 fell 0.2 per cent to close at 7723.55. The index spent most of the day higher after surging to a record on Tuesday. The Dow Jones Industrial Average rose 0.5 per cent to 54,349.12, reaching another record.
“The coiled spring investors have been waiting for has finally released, with the S&P 500 Index surging to record highs for the first time in two months,” said Mark Hackett, chief market strategist at Nationwide, in a report.
The tech-heavy Nasdaq fell 0.8 per cent to 26,363.44. It was weighed down by big technology companies losing ground, including a 4 per cent drop for Google’s parent company, Alphabet, and a 1.1 per cent drop for Microsoft.
Wall Street has been generally rising as companies head into the closing stretch of their latest round of earnings reports with sharp overall gains. Three-quarters of the companies within the S&P 500 have reported results so far, and Wall Street expects profit growth of 50 per cent when they are all finished.
The Walt Disney Co. rose 3.6 per cent after easily beating Wall Street’s profit forecasts, helped by a $US1 billion box office haul from Toy Story 5 and theme park revenue.
Booking Holdings jumped 6.6 per cent after reporting that strong travel demand had driven profit and revenue growth during its most recent quarter.
Elon Musk’s SpaceX plunged 13.6 per cent following the release of its first quarterly report as a public company, which showed that its spending on artificial intelligence grew twice as much as its revenues. The company did help give semiconductor giant Nvidia a 3.4 per cent boost after announcing it would exclusively use that company’s chips for its AI technology.
That announcement weighed on Advanced Micro Devices, which fell 7 per cent. Musk had previously said that SpaceX and his electric vehicle company, Tesla, would use chips from both Advanced Micro Devices and Nvidia.
Treasury yields slipped in the bond market. The yield on the 10-year Treasury slipped to 4.61 per cent from 4.63 per cent from late Tuesday.
Strong corporate profits and expectations for more growth ahead have been steering stocks higher. Wall Street has also been worried about stock prices becoming unjustifiably high, especially within the technology sector and for companies focused on artificial intelligence. Profit growth, especially for some of the big chipmakers, such as Nvidia, could help justify some of the big investments those companies are making in AI.
AI-focused companies, with their big market values, have been behind many of the big market swings and most of Wall Street’s gains.
“The market appears to be moving from rewarding companies for AI spending to assessing the revenue and earnings that these investments can generate,” said Brian Therien, analyst, investment strategy, at Edward Jones, in a report.
Inflation concerns have been hanging over markets and the Federal Reserve. The central bank has been holding its key benchmark rate steady as it monitors the costs and the impact on the economy. Wall Street expects the central bank to raise rates at least once before the end of 2026. Household spending remains resilient, despite the stress from higher costs on everything from gas to groceries.
The jobs market has been one of the stronger areas of the US economy, though growth has been slowing. Wall Street will get another update on Friday with the monthly employment report for July.
