Source : THE AGE NEWS
By Staff reporters
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket swung into the green in afternoon trading, sent higher by energy and tech stocks, which more than made up for losses from big names such as Macquarie Group and Aristocrat that had kept the market in negative territory for most of the session.
The S&P/ASX 200 finished up 10.6 points, or 0.1 per cent, at 8279.6, rising for its sixth session in a row. Six of its 11 industry sectors advanced, with tech and energy stocks the big winners. Their gains were countered by falls in consumer stocks and utilities. The Australian dollar was flat at US64.71¢.
The ASX was down for most of the day, but ended up in the green.Credit: Louie Douvis
The lifters
Tech stocks yet again followed their peers in the US, where chipmakers were leading a rally after AI giants Nvidia and Advanced Micro Devices said they would supply semiconductors for a massive data-centre project in Saudi Arabia. The ASX tech sector rose 1 per cent, led by family member tracking app Life360, which soared a further 9.5 per cent after reporting huge sales growth this week.
The iron ore heavyweights also extended their recent gains amid hopes for easing global trade tensions since the US and China on Monday announced a 90-day truce in their trade war and agreed to temporarily reduce tariffs on each other’s goods.
BHP, the world’s largest miner, rose 0.6 per cent. Its CEO Mike Henry told a global mining conference overnight that the mining titan was well-positioned to navigate its way through the uncertainty created by Trump’s trade wars. Rio Tinto added 0.5 per cent and Fortescue climbed 2.2 per cent.
Energy stocks were another industry extending its winning streak, with oil and gas giant Woodside gaining another 3.4 per cent and petrol refiner Ampol rising 1.7 per cent after oil prices jumped again overnight, spurred by the US-China trade detente and US President Donald Trump’s increasingly hostile rhetoric on Iranian supply.
Commonwealth Bank – the biggest stock on the ASX – rose 0.8 per cent after posting a rise in quarterly profits to $2.6 billion. NAB rose 1.4 per cent, ANZ added 0.1 per cent, while Westpac shed 1.2 per cent.
The laggards
Pokies maker Aristocrat slumped 8.9 per cent, dragging down the consumer discretionary sector. The stock crashed more than 13 per cent during the session after the company’s first-half results missed market expectations. Operating revenue rose 8.7 per cent to $3 billion and operating earnings went up 12.8 per cent to $1.25 billion, which was less than analysts had been forecasting.
Investment banking and financial services Macquarie Bank lost 1.6 per cent after finding itself in the crosshairs of the Australian Securities and Investments Commission (ASIC). Targeting the “millionaires’ factory” for the second time in a week, the corporate watchdog is taking Macquarie to court for failing to report as many as 1.5 billion short sales over 15 years.
The lowdown
The Australian sharemarket’s boomerang performance is continuing as investors take heart from the recent apparent easing in the trade war between the world’s two biggest economies, and the local economy is holding up.
The latest evidence for that was news on Wednesday that Australia’s wage growth was stronger than expected in the first three months of the year. The wage price index advanced an annual 3.4 per cent in the first quarter, exceeding economists’ estimates, Australian Bureau of Statistics data showed.
The top 200’s “dull” session on Wednesday fell within its tightest daily range since September 2024, IG Markets analyst Tony Sycamore said.
“The price action supports our view that after its rebound from the April low to within 3.5 per cent of its record high, a lot of ‘less-bad’ news is now priced in, and up against a cloud of continued tariff uncertainty,” he said.
Despite the meagre gains, both the S&P/ASX 200 and All Ordinaries indices have posted six straight sessions of gains and are trading at 11-week highs.
The Australian Bureau of Statistics will release April’s labour force data on Thursday and economists have widely tipped a steady unemployment rate of 4.1 per cent.
Along with today’s slightly higher-than-expected wage price figures, the unemployment print is not expected to stand in the way of a 25 basis point interest rate cut at the Reserve Bank’s meeting on Tuesday.
On Wall Street overnight, US stocks were buoyed by a surprise dip in inflation. The Labor Department’s consumer price index, a key gauge of inflation, rose 0.2 per cent in April, reversing March’s slight decline. But the annualised pace cooled to 2.3 per cent, a small decrease that marked the lowest level of headline inflation since early 2021. The reading follows Friday’s strong jobs report, which showed the US unemployment rate held steady at 4.2 per cent.
Both reports helped alleviate Wall Street’s concerns that the US economy was headed for a downturn.
“And just like that, the markets’ twin fears – a tariff-induced recession and sticky inflation – have been greatly assuaged,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, adding that the inflation report “removes the last big overhang for the market.”
The S&P 500 climbed 0.7 per cent and erased its loss for the year so far. The Dow Jones fell 0.6 per cent, and the Nasdaq composite rose 1.6 per cent as AI and other tech stocks led the way.
Stocks have been roaring back since the S&P 500 fell nearly 20 per cent below its record last month on hopes that Trump will ease his stiff tariffs on trading partners worldwide before they create a recession and send inflation surging higher. The S&P 500, which sits at the centre of many retirement accounts, is back within 4 per cent of its all-time high set in February and has erased its losses for the year so far.
Yet even with the encouraging inflation report, economists and analysts say inflation may still run higher in coming months because of Trump’s tariffs. That is likely to leave the Fed waiting for more data to guide its decision on whether and when to cut interest rates to help the economy.
“I think investors are aware that the trade deal is not done yet,” said Louis Wong, director for Phillip Securities Group in Hong Kong. “I would advise investors to remain cautious in the near term and to be prepared for unexpected news from the trade front,” he added.
With AAP, AP, Bloomberg
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