Source : THE AGE NEWS
By Hannah Kennelly
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket closed in the green on Tuesday, hitting a six-week-high as traders pored over policy announcements from Donald Trump’s first day in office.
The S&P/ASX200 climbed 55 points or 0.66 per cent, to 8402.40 points, with financials, materials, communications and consumer discretionary stocks rising most. The gains come after the ASX posted a strong performance on Monday.
The Australian sharemarket hit a six-week high on Tuesday morning. Credit: Dominic Lorrimer
Traders have been concerned that Trump’s threats of tariffs on China and other countries will stoke inflation and weigh on global growth. There was a sense of relief in global markets overnight after media reports that Trump would stop short of imposing tariffs on his first day in office. But late on inauguration day, he said he planned to enact previously threatened tariffs of as much as 25 per cent on Mexico and Canada by February 1.
The Australian dollar increased in the morning but then fell slightly by midday, and traded at 62.37 US cents shortly after 5pm.
The lifters
Energy was one of the best-performing sectors, with Yancoal and Ampol jumping 5.6 per cent and 0.6 per cent respectively. Woodside Energy reversed a fall earlier in the afternoon and bounced back (up 0.5 per cent)
Yancoal issued its quarterly report on Monday night, noting it had delivered on 2024 production guidance.
“We expect our cash operating costs to fall within guidance when we report our 2024 Financial Results in February,” the coal producer said in an ASX statement.
Mining heavyweights BHP and Rio Tinto climbed 0.9 per cent and 0.4 per cent and Fortescue also jumped 1.1 per cent. The four big banks had a strong day with CBA (up 0.7 per cent), Westpac (up 1.4), ANZ (2 per cent) and NAB (2.1 per cent) all recording gains.
The laggards
Utilities stocks slumped, with Origin Energy plummeting 2.3 per cent and Meridian Energy falling 2.8 per cent.
The healthcare sector was mixed with biotech giant CSL down 0.4 per cent. However, software medical imaging company Pro Medicus was up 1.8 per cent.
The lowdown
GSFM investment strategist, Stephen Miller said much of the Trump administration’s agenda – including the proposed tax cuts and deregulation – will provide a tailwind for equity markets.
However, he noted the risk for investment markets was the prospect of higher bond yields.
“A key factor is the already gargantuan US budget deficit, Miller said. “Given the prospect of large corporate tax cuts, it now seems certain that bond investors will be asked to swallow the enormous amount of bond issuance that is needed to fund a budget deficit of such an extraordinary magnitude.
“In so doing the bond market will likely develop episodic and potentially severe bouts of indigestion that have the potential to send yields higher.
“Certainly, Trump 2.0 has undertaken to embark on a high-grade weaponisation of trade that will fuel inflation via aggressive tariffs. That will inevitably result in a spike in inflation and bond yields.”
Overnight, London’s blue-chip FTSE 100 hit a record high for the second session in a row. The FTSE 100 index of top British firms ended up 0.2 per cent at a fresh closing peak, though off its intraday high.
S&P 500 and Nasdaq futures also gained as the greenback eased. US markets were closed for the Martin Luther King Jr. Day holiday.
Tweet of the day
Quote of the day
“Donald Trump’s marketing and merchandising prowess reached nosebleed heights with the creation of his own digital meme coin, $Trump — a product best described as what you would get if you crossed meme shares with cryptocurrency and added Trump’s DNA.
The creation of the marketable coin could certainly fall under the category of a get-rich scheme, but mainly for Trump.”
Read more of Elizabeth Knight’s opinion piece here.
You might have missed
Online retailer Catch.com.au will be shut down in the coming months after intensifying competition from Amazon, Shein and Temu led parent company Wesfarmers, which also operates Kmart and Bunnings, to axe the website it bought in 2019 to focus on its better-known retailers.
Nearly 200 jobs will be lost, while 100 e-commerce roles will be transferred to Kmart to leverage Catch’s warehouses after it closes in the fourth quarter of the 2025 financial year. The website will stop selling products on April 30.
Read more here.
