Australia’s share market has pierced yet another record after a pivot from the world’s largest central bank reinvigorated risk-on investor sentiment.
The S&P/ASX200 spiked to a new intraday peak of 9,054.5, but by midday was up just 11.5 points, or 0.13 per cent, to 8,978.9, while the broader All Ordinaries gained 17.5 points, or 0.19 per cent, to 9,251.8.
The wave of buying followed a Wall Street rally on Friday after US Federal Reserve chair Jerome Powell hinted at incoming interest rate cuts for the world’s largest economy.
“While emphasising the balance of risks between heating inflation and cooling employment, his observation that interest rates remain above neutral was enough to set investors buying stocks,” Moomoo market strategist Michael McCarthy said.
Despite the fresh record, only five of 11 local sectors were trading higher by Monday lunchtime, with raw materials stocks (+2.6 per cent) and the energy sector (+1.4 per cent) lifting the bourse.
Large-cap miners BHP, Fortescue and Rio Tinto each surged two per cent or more, tracking with a lift in iron ore prices.
On the energy front, Woodside and Santos were up more than 1.2 per cent each, despite oil and gas prices contributing to a 22 per cent drop in first-half profits for Santos.
Financials weighed on the bourse, slipping 0.9 per cent after opening the day at a new high, with all big four banks sliding into the red shortly after the opening bell.
Westpac was the worst performer, slipping 1.6 per cent to $38.36, while CBA fell 1.3 per cent to $170.56 a share.
Bendigo and Adelaide Bank gained 2.4 per cent to $13.31, despite posting a full-year net loss of $97.1 million, due mainly to a goodwill impairment announced the week before.
Retail stocks are having a rough day with consumer staples down one per cent and consumer discretionary stocks losing 0.9 per cent, tracking with downticks in Coles, Woolworths, Wesfarmers and JB Hi-Fi.
Dan Murphy’s and BWS owner Endeavour Group was also down after its full-year profits slipped more than 16 per cent amid supply chain issues and weaker alcohol sales.
Real estate stocks were performing well, up 0.4 per cent, tracking with a similar gain for sector giant Goodman Group.
Also riding on the back of a sector behemoth were healthcare stocks, up 0.8 per cent as CSL clawed back some of its post-earnings price plunge from the week before.
The Australian dollar shot ahead after the Fed’s comments sent yields higher and weighed on the greenback. The Aussie is buying 64.73 US cents, up from 64.19 US cents on Friday afternoon.
Looking ahead, the Australian Bureau of Statistics will release the monthly consumer price index on Wednesday, and Coles, Woolworths, Domino’s and Wesfarmers will post financial results this week.
Source: AAP
