ASX200 rallies to fresh record following US Fed September rate cut

The Australian sharemarket booked a fresh record high on Thursday as investors celebrated the US Fed’s “jumbo” rate cut.

The Australian sharemarket rallied to a fresh record high on Thursday as investors celebrated the US Federal Reserve’s “jumbo” rate cut move and shrugged off a surprise jump in local jobs figures.

The benchmark ASX200 climbed 49.8 points, or 0.61 per cent, to close at 8191.9, while the broader All Ordinaries index rose 52.7 points, or 0.63 per cent, to settle at 8417.

Tech stocks edged up 0.07 per cent to 3381.7.

Six out of 11 industry sectors ended in the green, led by a strong 2.31 per cent lift in materials.

Bourse heavyweight BHP surged 2.55 per cent to $40.19 a share after investment bank Morgan Stanley upgraded its outlook on the behemoth to “overweight” and iron ore futures jumped nearly 2 per cent to $92.50 a tonne.

Rio Tinto gained 3.53 per cent to $113.61 and Fortescue advanced 1.2 per cent to $17.64.

Uranium miners soared, with Paladin Energy rising 8.1 per cent to $9.88, Deep Yellow gaining 6.06 per cent to $1.22 and Boss Energy lifting 3.35 per cent to $2.78.

Rate-sensitive real estate stocks also rallied strongly, led by Goodman Group with a 1.53 per cent lift to $36.50 and Scentre Group with a 2.41 per cent rise to $3.83.

Investors weighed up a flood of critical data throughout the day, starting off with the momentous decision from the Fed to cut its benchmark rate by 50 basis points to the 4.75-5 per cent range.

“(The cut) will echo through global markets, as will the Fed’s slower economic growth and higher unemployment estimates,” moomoo market strategist Jessica Amir said.

US Federal Reserve Chairman Jerome Powell speaks at a news conference following the September meeting of the Federal Open Market Committee at the William McChesney Martin Jr. Federal Reserve Board Building on September 18, 2024, in Washington, DC. Australian shares rallied to a fresh record on the Fed’s rate cut decision. Picture: Anna Moneymaker / Getty Images North America / via AFP

“Investors will weigh up how much the Fed’s further (roughly) 2 per cent of rate cuts coming down the line could support global markets and asset prices.

“There’s a lot to assess over the coming weeks and months.”

US markets jumped in choppy trading after the announcement but faded to close down for the session.

The Dow Jones fell 103 points, or 0.25 per cent, to 41,503, while the S and P 500 index dipped 0.29 per cent to 5618 and the tech-heavy Nasdaq lost 0.31 per cent to 17,573.

But US futures pointed to a strong open in New York on Thursday night and the local bourse rallied in response.

“The dust has settled a little bit after the Fed and early signs are we are getting typical risk-on moves in the markets,” Capital.com senior financial market analyst Kyle Rodda said.

“Really we’re just following effectively what is expected from US markets tonight.”

Investors also shrugged off a resilient August jobs report, which showed the Australian economy added 47,500 jobs last month, above estimates of 25,000.

“It was a lot of part time jobs added to the economy and the unemployment rate stayed at 4.2 per cent,” Mr Rodda said.

“The number doesn’t add any weight to the RBA to potentially hike interest rates again.

“The numbers themselves were basically as expected, in terms of the unemployment rate, and most of the jobs added to the economy were part-time, which are considered jobs that are relatively minimals in terms of the wage pressures that come through.”

Mining giant BHP helped propel the materials sector to a 2.31 per cent gain on Thursday. Picture: NewsWire / Brenton Edwards

The big banks all moved higher, with Commonwealth Bank rising 0.49 per cent to $144.02, NAB edging up 0.2 per cent to $39.50, ANZ gaining 1.12 per cent to $31.50 and Westpac climbing 0.63 per cent to $33.37.

In corporate news, medical device firm Cochlear appointed Sarah Thom as its new Chief Financial Officer.

Ms Thom takes over from current chief financial officer Stu Sayers, who will be appointed president for the company’s Sia Pacific and Latin America operations.

Stock in the company fell 1.54 per cent to $284.54.

Perth Basin gas producer Strike Energy soared 9.76 per cent to 22c after the WA government announced it would permit onshore gas projects to export 20 per cent of new LNG supply.

“Allowing these projects to export while the market is balanced will help to stimulate development and ensure more gas is brought to market in decades to come,” the government said.

The top gainer on the ASX200 was recycling business Sims, which leapt 12.42 per cent to $12.40 after projecting $55m in earnings in its metal businesses for the first quarter of the 2025 financial year.

The largest laggard was ALS Limited, which tumbled 8.56 per cent to $13.67.

The Aussie dollar gained 0.55 per cent to buy US68c at the closing bell.

Originally published as ASX200 rallies to fresh record following US Fed September rate cut