Source : THE AGE NEWS
By Cindy Yin
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket closed higher on Wednesday, as a surge in technology stocks helped to make up for slump in mining and energy companies’ shares. The S&P/ASX 200 climbed 27.4 points, or 0.33 per cent, to 8,429.8 points at the close, with seven of the 11 industry sectors in the green.
Information technology was the top-performing sector, following a positive lead from Wall Street overnight, and the announcement of new private sector investments in artificial intelligence (AI) from US President Donald Trump.
The Australian dollar saw marginal losses, and was valued at 62.62 US cents at 4.25pm AEDT.
Wall Street gained across the board in its first trading session since Donald Trump’s inauguration.Credit: AP
The lifters
The information technology sector had a strong day, closing 2.4 per cent higher. Embattled logistics software company WiseTech Global jumped by 2.9 per cent while Xero (up 2.4 per cent), NEXTDC (up 2.2 per cent), and TechnologyOne (up 2 per cent) also rose.
The rises came after Trump announced “Stargate”, a project worth $US500 billion ($800 billion) aimed at building out projects for the further development of AI. It is a new partnership between companies OpenAI, Oracle, and Softbank.
Qantas was one of the biggest advancers on the ASX, climbing 3.7 per cent after announcing a revamp of its frequent flyer program. The four big banks had a positive day, with Commonwealth Bank (up 1 per cent), Westpac (up 0.7 per cent), ANZ (up 0.2 per cent), and NAB (up 1 per cent) all rising.
The laggards
Mining was the weakest sector, with mining heavyweights BHP falling by 2 per cent, Fortescue falling 1.8 per cent, and Rio Tinto dropping by 0.8 per cent, while lithium miner Pilbara Minerals lost 1.2 per cent.
Meanwhile, Woodside shares fell 1.9 per cent after news that the Australian oil and gas producer delayed investment decisions on two clean energy projects in the US – one in low-carbon hydrogen and one in concentrated solar. Australian oil and gas producer Santos recovered early losses of 0.4 per cent to trade flat at the close.
The lowdown
As investors absorb the ramifications of Trump’s return to the White House, the new US President’s comment that he was considering 10 per cent tariffs on imports from China hit ASX-listed miners. China is the biggest export market for Australian minerals, and there are concerns a trade war could further slow China’s growth.
Nick Twidale, Chief Market Analyst at ATFX Australia said he expected Australian miners to be “under pressure” until there was further clarity on how Trump’s proposed tariffs may affect China and Australia’s mining sector.
“Obviously there will be a direct proportional relationship between mining stock and how hard he [Trump] goes on tariffs, as well as how quickly he goes on tariffs,” Twidale said.
“I think everything is conditional on what clarity and certainty we get from the US…if he hits China hard with tariffs, I think Australian industry and the Australian dollar will take a bit of a hit.”
Similarly, Twidale said sharp increases in the tech sector was linked to Trump’s announcement of the AI joint venture to strengthen the fast-growing technology.
“Throwing 500 billion at AI infrastructure is great, and that’s obviously going to boost tech stocks, not just in the US, but across the globe,” he said.
Quote of the day
“We’re talking about a tariff of 10 per cent on China, based on the fact that they’re sending fentanyl to Mexico and Canada… Other countries are big abusers also, you know it’s not just China. We have a $350 billion deficit with the European Union. They treat us very very badly, so they’re going to be in for tariffs.”
US President Donald Trump on imposing a 10 per cent tariff on imports of Chinese-made goods, which could happen as soon as February 1.
You might have missed
Australian energy giant Woodside has paused two major clean energy projects it had been pursuing in the United States, in the latest sign of fossil fuel companies taking a step back from economically challenging green investments.
The move by Perth-based Woodside, the nation’s largest oil and gas producer, comes as US President Donald Trump returned to the White House this week and signed a slew of orders aimed at promoting traditional fossil fuels and removing support for renewable energy and other clean technologies.
With AP, Bloomberg
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
