Tesla, Wall Street drive ASX resources and tech gains

Elon Musk becomes $10bn richer overnight, as US gains filter through to the Australian market in trading on Wednesday.

Strong US markets, including a big win for Tesla, bolstered the ASX back into positive territory on Wednesday.

Tesla helped Wall Street motor along overnight, as Australian mining and technology equities got on board for a ride into the green.

The S&P/ASX200 gained 0.28 per cent, or 21.7 points, to 7,739.90, after opening the week with losses on the benchmark.

Resources were particularly buoyed by iron ore futures in Singapore, with BHP (1.14 per cent), Fortescue Metals (1.62 per cent) and Rio Tinto (1.24 per cent) all going up.

The ASX resources sector made gains on Wednesday, though it is down more than six per cent on the year. Picture: NewsWire / Rebecca Le May

West Texas crude oil prices decreased, as fears a hurricane in the Gulf of Mexico would hit key processing plants were allayed.

Comments from the US Federal Reserve that the country was on a “disinflationary path” gave investors hints of possible interest rate cuts later this year.

Wall Street then lifted, with the S&P500 (0.6 per cent) and the Nasdaq (0.8 per cent) tacking on gains to their own record highs, reached respectively in the past fortnight.

Tesla (Nasdaq) rallied more than 10 per cent, as the number of cars it churned out for the quarter ended up being not as bad as expected.

Elon Musk’s net worth jumped between $US10bn to $12bn on trading in the US on Tuesday. Picture: Ryan Lash / TED Conferences / AFP

OANDA senior market analyst Kelvin Wong said Wednesday’s ASX200 performance rode the positive momentum seen overnight on Wall Street, primarily in the outperformance of the US mega-cap technology stocks, leading to the ASX information technology sector being the strongest performer.

There was positive ABS retail data on Wednesday, largely driven by early end of financial sales, which did not reflect in the market, with the discretionary sector trading sideways.

Seven of the 11 sectors were in the green for the day though, most notably technology, materials and real estate.

The ABS data showed building approvals rose in May, lifting 5.5 per cent across the month driven by private sector dwellings, excluding houses, which rose 16.3 per cent.

HMC Capital, which is looking to establish a $5bn private credit platform, was another strong performer in the real estate sector, gaining 1.79 per cent, closing at $7.10.

Servcorp went up 3.46 per cent, to $4.19 on the day. The company, which sells serviced offices to firms of all sizes, is up 40 per cent in the past 12 months, though still below pre-pandemic prices.

Elsewhere, Flight Centre ($20.63) rose 3.2 per cent, on the back of possible Virgin Airline tweaks which would benefit travel agents.

While Rio, Fortescue and BHP all made gains, mine servicing company Mineral Resources had a fruitful outing, picking up 2.8 per cent to close at $55.17.

Originally published as Tesla, Wall Street drive ASX resources and tech gains