Source : THE AGE NEWS
By Staff reporters
Welcome to your five-minute recap of the trading day.
The numbers
Australian shares have closed higher as a rally in mining, property and healthcare stocks helped to bring about another positive day on the market, capping off a solid week amid hopes of a calming down in global trade tensions.
The ASX 200 gained 46.2 points or 0.6 per cent, closing at 8343.7, with seven of 11 industry sectors in the green. It was the eighth positive session in a row for the ASX, and it followed a gain on Wall Street, where stocks rose on the back of a decline in US Treasury bond yields.
The ASX 200 has risen for eight sessions in a row.Credit: Getty Images
The lifters
Miners, a major part of the Australian market, helped to drive the bourse higher, with BHP gaining 1.4 per cent, Rio Tinto climbing 0.9 per cent, and Fortescue rising 1.3 per cent. A rise in gold prices sent local players higher, with Evolution Mining (up 3.6 per cent), Perseus (up 3.7 per cent), Newmont (up 3.6 per cent) and Northern Star (up 2.7 per cent) surging.
Property stocks, which are sensitive to interest rate expectations, had a strong day, with Goodman Group rising 2.9 per cent, Scentre Group gaining 2.5 per cent, and GPT up 3.5 per cent.
Banks were mixed, with Westpac (up 0.3 per cent) and National Australia Bank (up 1.1 per cent) both rising, while ANZ fell 0.3 per cent and Commonwealth Bank edged down 0.1 per cent, after hitting a record close on Thursday.
The laggards
Property giant Dexus fell 1.1 per cent after the ASX-listed company, which owns a stake in Melbourne Airport, was served a notice by the board of the airport alleging it had breached confidentiality arrangements in the sale process of its shares. Dexus has denied the allegations.
Technology stocks retreated after a strong run in recent days, with logistics software business WiseTech falling 2.2 per cent and accounting software group Xero losing 1.1 per cent, following a strong bounce on Thursday when it handed down its results.
The lowdown
This week’s run of gains on the ASX comes after the US and China agreed to a 90-day truce in their trade war on Monday afternoon (Australian time), a move that has raising investors’ hopes globally.
AMP deputy chief economist Diana Mousina said markets had cheered US President Donald Trump’s deal with China because they interpreted it as a sign that “if Trump can make a deal with China, he can make a deal with anyone”.
She said the deal announced with China meant that although tariffs on goods into the US were still high, they were substantially lower than the highs reached after “Liberation Day” in April, when Trump spooked markets by announcing sweeping tariffs on trade partners.
“The trade deal with China indicates that other trade deals are likely to be announced before the end of the 90 days,” Mousina said.
Locally, the big financial news next week is likely to be on interest rates, with markets betting the Reserve Bank on Tuesday will announce a cut in the cash rate from 4.1 per cent to 3.85 per cent.
On Wall Street on Thursday night (Australian time), US stocks drifted higher in quiet trading following a jumble of mixed reports that offered little clarity on how the US economy is managing through Trump’s trade war.
The S&P 500 rose 0.4 per cent, enough to extend its winning streak to a fourth day and to pull within 3.7 per cent of its all-time high set earlier this year. The Dow Jones added 271 points, or 0.6 per cent, and the Nasdaq composite slipped 0.2 per cent.
Wall Street stocks got a lift from easing Treasury yields in the bond market. They fell after the economic reports suggested the Federal Reserve may have more room to cut interest rates later this year to bolster the US economy if it weakens under the weight of high tariffs.
But the reports did little to spell out whether the economy is falling toward a recession, as many investors had been fearing, or shaking off the uncertainty after Trump called off many of his tariffs temporarily. The headline reports said shoppers spent less at US retailers last month than expected, while inflation was better at the wholesale level than economists forecast. Other updates said US manufacturing looks like it’s still contracting, but fewer US workers are applying for unemployment benefits than expected.
Even though China and the United States recently agreed on a 90-day stand-down for many of their tariffs, “the trade story isn’t over, and it’s still going to take time for tariffs to make themselves felt in economic data,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
Such uncertainty showed itself in Walmart’s stock, which slipped 0.5 per cent even though it reported a bigger profit for the latest quarter than analysts expected.
Like other US companies struggling through Trump’s on-again-off-again rollout of tariffs, Walmart said it decided not to offer a forecast for how much profit it will make in the current quarter.
Chief Financial Officer John David Rainey pointed to “the range of near-term outcomes being exceedingly wide and difficult to predict”, though the company did say it expects sales to grow between 3.5 per cent and 4.5 per cent, not including the swings that shifting values of foreign currencies can bring.
The nation’s largest retailer also said that it must raise prices due to higher costs caused by Trump’s tariffs.
Elsewhere on Wall Street, Dick’s Sporting Goods tumbled 14.6 per cent after it said it would buy the struggling Foot Locker chain for $US2.4 billion ($3.8 billion). Dick’s also said that it made a better profit for the latest quarter than analysts expected.
Foot Locker soared 85.7 per cent after coming into the day with a loss of nearly 41 per cent for the year so far.
All told, the S&P 500 rose 24.35 points to 5916.93. The Dow Jones Industrial Average added 271.69 to reach 42,322.75, and the Nasdaq composite fell 34.49 to 19,112.32.
With AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
