ASX booms on US interest rate outlook

The ASX booked a ‘relief rally’ on Thursday on the back of a US Federal Reserve meeting that maintained its outlook for three rate cuts in 2024.

The Australian sharemarket surged higher in a thumping “relief rally” on Thursday after the US Federal Reserve maintained its outlook for three interest rate cuts in 2024.

The benchmark ASX 200 jumped 1.12 per cent, or 86.20 points, to end the day at 7782, while the broader All Ordinaries index lifted 1.13 per cent, or 90.1 points, to close at 8044.60.

Australia’s technology stocks also lifted 1.11 per cent to end at 3088.9.

The Aussie dollar gained 0.53 per cent against the Greenback to buy US66.2c at the closing bell.

Some investors had expected the Fed to trim its earlier December rate cut outlook from three cuts to two and the maintenance of its position triggered an immediate surge in asset prices.

“Everything is up,” Capital.com senior financial market analyst Kyle Rodda said at the end of trading on Thursday.

“You could basically see the move right across asset prices about 5.30am, whenever it was (Federal Reserve chairman Jerome) Powell started speaking.”

The benchmark ASX 200 jumped 1.12 per cent, or 86.20 points, to end the day at 7782. Picture: NCA NewsWire/ Gaye Gerard

Nine of 11 industry sectors ended in the green, with only Health Care and Utilities recording declines for the day.

Financials led the way with a 1.74 per cent gain.

The big four banks all booked handsome gains, with NAB leading the pack with a 2.57 per cent rise to $34.78 a share.

Commonwealth Bank jumped $2.03 per cent to $118, while Westpac rose 1.87 per cent to $26.67 and ANZ climbed 1.12 per cent to $29.01.

The iron ore giants continued the week’s commodities rally, with BHP up 0.78 per cent to close at $44.15 and Fortescue rising 1.7 per cent to $25.17, though Rio Tinto dipped 0.13 per cent to finish at $121.14.

Thursday’s blockbuster jobs report was not enough to dampen spirits, despite the prospect the blowout figures could trim interest rate cuts from the Reserve Bank of Australia.

The Australian economy added a 116,500 jobs in February, according to the ABS, far outstripping an expected increase of 40,000.

Nine of 11 industry sectors ended in the green.

The jobless rate fell to 3.7 per cent, down from 4.1 per cent the month prior.

“It changes the conversation about what is happening in the labour market at the moment, but you don’t fight the Fed, and the Fed gave us the green light to rally,” Mr Rodda said.

In corporate news, gold stocks surged as prices hit a record high of $3357 an ounce.

Northern Star Resources lifted 2.31 per cent to end at $13.71 and Evolution Mining, which boasts assets in NSW, Queensland, WA and Canada, boomed 5.15 per cent to settle at $3.47 a share.

Bellevue Gold flew higher 8.15 per cent to $1.99 for a weekly gain of more than 18 per cent.

IG market analyst Tony Sycamore said Aussie tech stocks would “retake their place in the driver’s seat” with the Fed now “out of the way” for another six weeks.

‘Buy now pay later’ firm Zip zoomed up 8.36 per cent to close at $1.49 while Xero gained 2.36 per cent to hit $135.32.

Tech firm Brainchip Holdings was the ASX 200’s biggest gainer, exploding 16.67 per cent to settle at 35c.

Aft Pharmaceuticals was the biggest laggard, declining 7.72 per cent to $2.75 a share.