ASX rallies behind uranium stocks after choppy session on Wall Street

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket notched up another win on Friday, defying a weak lead from Wall Street as investors digested the implications of a rising US dollar and tumbling Tesla shares.

The S&P/ASX 200 index gained 53.8 points, or 0.7 per cent, to finish the shortened trading week, with 10 of the 11 industry sectors in the green. It follows a winning session on Thursday buoyed by mining and energy stocks.

The Australian dollar added marginal gains, valued at 62.18 US cents as of 4.10pm after setting a new two-year low on Wednesday.

The Australian sharemarket has started the new year on a positive note.Credit: Dominic Lorrimer

The lifters

Energy shares traded higher, continuing their positive momentum from the previous day. Oil and gas giant Woodside rose 1 per cent, Santos gained 1.6 per cent, while Ampol (up 2.4 per cent) also grew. Wider gains in the energy sector followed crude oil prices rising above $US72 on Thursday for the first time in two months.

Uranium miners Deep Yellow (up 9.4 per cent), Boss Energy (up 5.2 per cent) and Paladin Energy (up 4.3 per cent) were the best individual performers on Friday. It came after a surge in uranium stock when Canadian producer Cameco – the largest publicly traded uranium company – said production at its Inkai joint venture in Kazakhstan would be unexpectedly halted due to a lapse in government authorisation.

Real estate was another strong performer. The sector was led by Goodman Group (up 1.4 per cent), Scentre Group (up 1.2 per cent) and Stockland Corporation (up 1.5 per cent).

Commonwealth Bank (up 1 per cent) posted gains and was joined in the green by NAB (up 0.8 per cent), ANZ (up 0.9 per cent), Westpac (up 0.7 per cent) and Macquarie Group (up 0.9 per cent). Insurers Suncorp (up 1.1 per cent) and QBE (up 1 per cent) also rose.

Tech giant WiseTech added 0.6 per cent, while Xero (up 0.4 per cent), TechnologyOne (up 0.1 per cent) and NextDC (up 0.7 per cent) also grew. Kmart and Bunnings owner Wesfarmers (up 0.6 per cent) rose, as did Aristocrat Leisure (up 1.1 per cent).

The laggards

Mining giants BHP (down 0.5 per cent), Fortescue (down 2.1 per cent) and Rio Tinto (down 0.6 per cent) all retreated.

Wider losses from the sector were allayed by gains to goldminers Newmont (up 3.2 per cent) and Northern Star Resources (up 2 per cent), which rallied behind a surging gold price.

The lowdown

ATFX Australia chief market analyst Nick Twidale said the ASX was trading in “holiday” mode this week, noting an outsized influence of foreign affairs rather than economic principles influencing investor behaviour.

“Most of the movements in the market in the last couple of weeks aren’t based on underlying fundamentals but from geopolitical updates,” Twidale said. “It’s been good to have a nice start, but let’s see what happens next week.”

Twidale forecast “lots of nervousness” among investors ahead of Donald Trump’s second presidential inauguration on January 20, which is expected as the first major test for the ASX in 2025.

“It’s fairly positive that the market has been able to rally both here and in the US following Trump’s election victory,” Twidale said. “Australia is even more vulnerable because if we hear big anti-China rhetoric from Trump, that could affect the sharemarket here.”

On Thursday, all three major US stocks ended the session in negative territory, a reversal of an earlier rally but off session lows.

“We had some macro news but somewhat mixed, and you know we have a very strong US dollar today,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“There are a few hurdles over the next couple of weeks ... next Friday’s employment data and the beginning of fourth-quarter earnings.”

Shares of Tesla sank 6.1 per cent after the company reported its first annual drop in deliveries, as incentives failed to stem a decline in demand for its ageing line-up of electric vehicles.

Tesla has reported its first annual drop in deliveries.Credit: Bloomberg

Wall Street’s main indexes notched double-digit gains in 2024, with the benchmark S&P 500 recording its best two-year run since 1997-98. Those gains were driven by the US Federal Reserve’s first rate cuts in 3½ years, the ongoing artificial intelligence boom and expectations of pro-business policies under the Trump administration.

The rally lost steam in the closing weeks of 2024, with the S&P 500 and the Dow marking declines for December, as markets priced in the likelihood of fewer rate cuts from the Fed this year.

The S&P and the Nasdaq have now posted five consecutive sessions in the red, their longest losing streaks since mid-April.

The Dow Jones Industrial Average fell 151.95 points, or 0.36 per cent, to 42,392.27, the S&P 500 lost 13.08 points, or 0.22 per cent, to 5868.55, and the Nasdaq Composite lost 30 points, or 0.16 per cent, to 19,280.79.

Tweet of the day

Quote of the day

“Tesla had pointedly challenged the prevailing view on the street about one of the easiest figures for any enterprise to predict, let alone one that has rebranded itself as an AI giant.”
– Bloomberg columnist Liam Denning on Tesla’s failure to meet its annual vehicle sale guidance in 2024, and the impacts slowing vehicle sales might have for Elon Musk’s technology empire.

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Australia’s three major airlines – Qantas, Jetstar and Virgin Australia – are well behind their international rivals when it comes to punctuality, with all three at the bottom of the pack in international ranking data published on Thursday.

Qantas was the best of the lot locally, with 73.9 per cent of its flights arriving within 15 minutes of their scheduled time, a widely used measure of performance among airlines, according to data compiled by aviation data provider Cirium.

with Reuters