‘Unusually low’: Investors wait for US election results

A weaker than expected Aussie dollar and uncertainty around the US election led to a quiet trading day on Monday.

Australia’s technology sector has rebounded strongly on a relatively quiet day for the market, as a weaker than expected Aussie dollar weighs on investors’ confidence.

The benchmark ASX 200 index gained by 10.20 points, or 0.12 per cent, to finish the session at 8,221.50 points.

The broader All Ordinaries rose by 10.90 points, or 0.13 per cent, to close at 8,478.20 points.

The Australian dollar fell 0.2 per cent to 65.90.

The AUD/USD is on track for a decline of more than 4.80 per cent for the month of October, if it achieves this, it will mark the biggest monthly fall since September 2022.

IG’s market analyst Tony Sycamore told NewsWire the Australian dollar fell off the back of strong US economic data released in September which showed non-farm payroll data at the start of October being stronger than expected.

This lowered expectations for a rate cut in the US.

The Aussie dollar falls off the back of strong US trading data: Picture, money cash generic

“The range for the index is the closest it’s been in months. When you see a low of 8,199 points and high of 8,226, we’ve basically had a 27 point range for the day which is very unusual, ” he said.

“It has been a really quiet day from an index level but under the hood there’s been some interesting moves with tech stocks doing well, materials performing strongly and investors in this holding pattern with one week until the US election.”

Former ASX tech darling ZIP was the top riser on Monday, up 3.71 per cent to $2.79.

“ZIP has had a really good turnaround with a large part coming from the US with consumers being resilient … and for the most part Australia as well. I don’t think anyone really saw this one coming when it fell to 32 cents, so the fact it is trading to $2.79 is a good turnaround story. Although it hasn’t really recovered toward its glory day prices just yet,”Mr Sycamore said.

The market analyst said the Information Technology sector as a whole in Australia was the big winner today off the back of strong figures out of Wall Street.

ASX trading volumes were low. Picture: ASX investing Australian money generic

“It is a massive week in terms of mega tech earnings in the US,” he said.

“Expectations are high, but what we’ve seen in the past is these tech companies jump over the bar. We saw a glimpse of this with Tesla last week [which jumped 22 per cent on its earning announcement]”.

On the flip side Real Estate Investment Trusts (REITs) and financials were two of the weaker performing sectors due to rate expectations.

“The REITs sector has fallen about five and a half per cent in the last three weeks and that is because data out of the US is better than expected, taking out expectations for aggressive rate cuts in the US,” Mr Sycamore said.

“The markets were pricing in 40 basis points of a 50 basis point rate cut by the Fed in November, but now expectations have fallen to a 23 cut. That is bad news for people looking for aggressive rate cuts but good news for the US economy.”

Originally published as ‘Unusually low’: Investors wait for US election results