Source : THE AGE NEWS
By Staff reporter
The Australian sharemarket has avoided an embarrassing start to the Christmas trading week, with the market operator managing to fix its system for processing trades made by investors.
On Friday, trading on the ASX was hampered by a technical issue delaying the settlement of trades on its Clearing House Electronic Subregister System, known as CHESS. The glitch forced the market operator to defer settlements scheduled for Friday to Monday, December 23, leaving brokers in a jam as billions of dollars worth of transactions couldn’t be finalised.
The ASX narrowly avoided a festive fumble on Monday morning after a key system for processing trades was hampered by a glitch on Friday.Credit: Dominic Lorrimer
The ASX said on Sunday that it had successfully resolved the technical issue, with settlement services to start as normal and will process all trades from last Wednesday and Thursday held up by the glitch.
The CHESS system manages the transaction of shares between a buyer and a seller. Had the issue not been resolved, the ASX could have been forced to delay the time of market opening on Monday, or at worst cancel trading altogether.
The ASX suffered a full-day trading outage in November 2020, and the market operator’s effort to upgrade the ageing CHESS system, which is 30 years old, has suffered significant delays.
However, investors are set to be rewarded with only a meagre rise on Monday following a grim week for both local and international stocks, despite a small rally in US markets on Friday.
Local futures indicate at market open the S&P ASX200 will gain just 0.16 per cent to 8079 points.
At the end of last week, the S&P500 rose 1.1 per cent for its best day in six weeks and shaved its loss for the week down to 2 per cent. The Dow Jones Industrial Average jumped 498 points, or 1.2 per cent, and the Nasdaq composite gained 1 per cent.
Superstar stock Nvidia and other big tech companies led the market, which got a lift after a report said a measure of inflation the Federal Reserve likes to use, was slightly lower last month than economists expected. It’s an encouraging signal following recent reports suggesting inflation may be tough to get all the way down to the Fed’s 2 per cent goal from its peak above 9 per cent.
The threat of higher inflation was one of the reasons Fed Chair Jerome Powell gave this week when the central bank hinted it may deliver fewer cuts to interest rates next year than it earlier expected.
That warning sent a shock through the stock market, which had run to 57 all-time highs this year amid the widespread assumption the Fed would deliver a string of cuts to rates into 2025. Now traders are largely betting on one, two or perhaps even zero next year, according to data from CME Group.
“When optimism is rising and market multiples are expanding, it just takes a little fear to take the veneer off a market rally,” according to Brian Jacobsen, chief economist at Annex Wealth Management.
Friday’s better-than-expected inflation data pushed traders to trim their bets for zero cuts in 2025, which they now collectively see a 16 per cent chance of. Easier interest rates would boost the economy by making it cheaper for households and businesses to borrow, but they could also provide fuel for inflation.
Critics had been warning stock prices were vulnerable to drops after running so high and that the market likely needed everything to go correctly to justify its stellar gains for the year. Besides the diminished hopes for several rate cuts next year, Wall Street got another reminder late Thursday that everything may not go as expected.
In crypto markets, Bitcoin continues to toil under historical highs, dropping below $US100,000 at the end of last week where it remains, trading at $95,300 on Monday morning.
In the bond market, Treasury yields eased. The yield on the 10-year Treasury fell to 4.52 per cent from 4.57 per cent late Thursday.
In stock markets abroad, indexes fell modestly across much of Asia and Europe.
