Source : the age
The Australian sharemarket advanced on Tuesday, led by tech stocks after an AI-fuelled rally on Wall Street, even as oil prices ended their four-day drop during the session.
The S&P/ASX 200 finished 25.90 points, or 0.3 per cent, higher at 8757.80, with seven of its 11 sectors in the green. The gains came after the benchmark index closed flat on Monday. The Australian dollar was steady at US71.16¢.
Tech stocks led the session’s gains after America’s tech-focused Nasdaq index hit a record overnight, with chip stocks and other companies in the artificial-intelligence industry leading the way. AI chip giant Nvidia climbed 2.3 per cent and Advanced Micro Devices rallied 9.9 per cent.
Tech leaders have recently warned a slowdown is needed in AI’s development for the safety of humanity. Yet even if the industry leans into more measures for safety, some analysts say it will still be hungry for chips to power it all. Early signs of success for Meta’s new artificial intelligence agent Muse underlined the bullishness around demand for the chips needed to power such agents.
Of the local tech names, software giants WiseTech Global and Xero climbed 2.9 per cent and 1.6 per cent, respectively. AI data centre operator NextDC jumped 3.8 per cent, and digital networks operator Megaport gained 4.3 per cent. Family tracking app Life 360 rose 2.9 per cent.
The tech rally extended into real estate investment trusts, where AI data centre landlord Goodman Group, the nation’s largest property stock, climbed 1.4 per cent.
The mining heavyweights were also higher, albeit at a more moderate pace. Iron ore and copper giants BHP and Rio Tinto were up 0.7 per cent and 0.1 per cent as the red metal advanced for a sixth day toward a record as falling inventories and pre-Christmas season buying signalled tightening supplies in China’s physical market.
WA mineral explorer Global Lithium Resources’ share price soared 49.6 per cent to $1 after the company said it agreed to be taken over by United Arab Emirates-based Titan Lithium for $1.15 a share, valuing it at $333 million.
The ASX’s overall gains continued even as oil ticked higher again after four days of losses, with traders weighing Middle East supply risks against a diplomatic push to end the US-Iran war.
Brent rose toward $US102 a barrel after tumbling by nearly 8 per cent over the previous four sessions. While that was much higher than its roughly $US72 price earlier this year, it’s down from the nearly $US110 it touched last week.
President Donald Trump is set to address the United Nations General Assembly in New York later on Tuesday EST, and may meet with his Iranian counterpart, Masoud Pezeshkian, on the sidelines. In addition, the US president will host a summit with China’s leader Xi Jinping this week.
“Investors will be watching for any progress on the diplomatic front as President Trump meets with Presidents Pezeshkian and Xi,” said Hamad Hussain, senior climate and commodities economist at Capital Economics. However, it is not guaranteed the talks will result in tangible progress given how far apart the US and Iran remain in their demands, he added.
Supply risks in the Middle East remain acute, with a tanker reportedly struck in the Strait of Hormuz on Monday, according to UK Maritime Trade Operations. Meanwhile, satellite data has shown Saudi Arabia’s observed loadings from inside the Persian Gulf have jumped, suggesting the kingdom has shifted exports back toward the waterway after the shutdown of a key cross-country pipeline.
The oil rebound had yet to filter into energy stocks, which declined on the back of its four-day slump. Oil major Woodside fell 2.4 per cent and Santos dropped 1.4 per cent, while refiners Ampol and Viva Energy swung into the green and closed up 2.4 per cent and 0.9 per cent, respectively. Airlines still enjoyed a boost from the price reprieve, with Qantas and Virgin Australia both up 1.8 per cent.
Amid the renewed risk-on sentiment, defensive sectors such as utilities and consumer staples struggled in Tuesday’s session. Origin Energy slumped 4 per cent and AGL dropped 2.3 per cent. Supermarket chain Woolworths dropped 0.5 per cent and Coles was flat.
Discretionary consumer stocks blossomed, with Wesfarmers up 0.8 per cent, pokies maker Aristocrat up 2.3 per cent and fashion jewellery chain Lovisa up 4.5 per cent.
The financial sector was mixed, with Commonwealth Bank dropping 0.4 per cent, National Australia Bank down 0.3 per cent and Westpac down 0.1 per cent, while ANZ Bank rose 0.3 per cent.
Overnight on Wall Street, the S&P 500 jumped 1.5 per cent and pulled within 0.4 per cent of its record set last month. The Dow Jones Industrial Average added 0.7 per cent, and the Nasdaq composite leaped 2.3 per cent.
While market worries remain about how much oil is available for customers worldwide, ING commodities strategists wrote in a commentary on Monday that profit-taking by investors after the recent jump in oil prices, together with hopes for discussions at this week’s UN General Assembly and at a meeting between China’s and America’s leaders, helped improve optimism.
US Treasury Secretary Scott Bessent said following talks on Sunday with Chinese Vice Premier He Lifeng that the US had “a very successful engagement” with the Chinese side.
In Beijing, China’s Foreign Ministry on Monday confirmed that Xi Jinping will pay a state visit to the US between September 23 and 25. Experts and policymakers believe trade, tariffs and AI safety are likely to be discussed.
Skydance-owned Paramount fell 2.9 per cent as it reached a settlement in lawsuits brought by 12 state attorneys general and the Writers Guild trade union challenging its $US110 billion ($154 billion) acquisition of Warner Bros Discovery, which jumped 10.8 per cent.
The parties worked through the weekend to reach the deal, which includes protections designed to limit the market power and ensure the editorial independence of the media giant, which will control two of Hollywood’s biggest studios, two major subscription streaming services and dozens of TV channels ranging from CBS to HBO.
Paramount has promised to release 30 movies a year at the combined studios, a move designed to placate cinema owners and Hollywood talent who believed the merger would reduce film output. Under the terms of the deal, half of those films must be produced by the new company.
with AP, Bloomberg
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