BHP boosts ASX to record high; Mesoblast rockets 35 per cent

Welcome to your recap of the trading day.

The numbers

The Australian sharemarket rally set a new 100-day high after Wall Street rose to records following better-than-expected updates on the US economy.

All eyes will be on Wall Street tonight.Credit: AP

The benchmark S&P/ASX 200 index on Friday gained 118.2 points, or 1.4 per cent, to 8758.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9006.

The gains were the ASX 200’s biggest since a 4.5 per cent rally on April 10, as well as its first time crossing 8700. For the week, the index rose 3.4 per cent, its best weekly performance since a 3.4 per cent gain in mid-December.

The Australian dollar was trading for US65.02¢, from US64.71¢ on Thursday.

The lifters

Healthcare led the gains, rising 2.6 per cent. Mesoblast rocketed 34.6 per cent after the Melbourne biotech announced it had made $US13.2 million in sales, following the launch of its stem-cell treatment for a complication of bone marrow transplants in children in March. Clarity Pharmaceuticals surged 11.8 per cent and CSL was 3.6 per cent higher.

Mining giant BHP climbed 3 per cent after releasing record copper and iron ore numbers for the year to June 30, but flagged rising costs and delays at its major potash project in Canada.

The largest Australian miner revealed it had suffered a cost blowout of more than $2 billion at its huge potash project in Canada, and flagged delays in bringing the mine to production.

While BHP earns most of its money mining iron ore in Western Australia, the company’s Jansen project in Canada’s Saskatchewan province presents a big bet on future demand for potash, a potassium-rich salt used in fertiliser that can make crops drought resistant and help them grow.

The mining giant had originally expected the first phase of Jansen would cost $US5.7 billion ($8.7 billion), but warned it now expected to spend between $US7 billion and $US7.4 billion. The first delivery of potash from the mine would now be mid-2027, rather than 2026, it said.

Elsewhere across BHP’s far-flung mining operations, production of iron ore – the key raw ingredient needed to manufacture steel – edged 2 per cent higher to 70.3 million tonnes during the three months to June 30. Its output of copper, which is increasingly needed in electrical wiring and renewable energy infrastructure, also rose 2 per cent in the quarter.

“BHP delivered record iron ore and copper production, which demonstrates the strength and resilience of our business and underpins our ability to deliver growth and returns to shareholders amid global volatility and uncertainty,” chief executive Mike Henry said.

Rivals Rio Tinto (up 1.8 per cent) and Fortescue (up 0.5 per cent) also rose as iron ore prices strengthened overnight. Liontown Resources, up 10 per cent, was one of the day’s top five movers.

The big four banks ended the session higher. Westpac gained 1.8 per cent, NAB added 1.3 per cent, ANZ Bank was up 1.2 per cent, while Commonwealth Bank – the largest stock on the ASX – closed 0.9 per cent higher.

The laggards

The biggest losers were Yancoal (down 5.8 per cent), followed by Medibank Private (2.5 per cent lower). Shares in drinks retailer and hotel group Endeavour Group fell 2.4 per cent.

The lowdown

The local bourse has reached an all-time high after BHP lifted the sharemarket following record hauls for iron ore and copper, as the global equity rally gained fresh vigour as strong economic data eased concerns about the health of the US economy.

The S&P/ASX 200 surpassed 8700 for the first time on Friday, gaining 2.1 per cent over the past five days to land 0.2 per cent off of its 52-week high. The index record was broken twice this week after signs of a tougher local jobs market helped set the scene for lower interest rates in the months ahead.

Jason Todd, CEO of Australian equities fund Ten Cap, expects the rally to continue over the second half of 2025.

“From an equity perspective, whether it is international or domestically, we think the market will be meaningfully higher by year-end,” said Jason Todd, CEO of Australian equities fund Ten Cap. “If you’re not long, you need to get long, and we think you just stay long until [and if] we see these risks amplify.”

Ten Cap co-founder Jun Bei Lui expected mid and small-cap companies to have an even better year than some of their large counterparts.

Former Reserve Bank of Australia economist Luke Hartigan said the jobless rate, which rose to its highest level in nearly four years, met the central bank’s year-end unemployment forecast.

“This just adds information to say that some modest reduction in interest rates is warranted,” the University of Sydney economics lecturer said.

After its July meeting, the Reserve Bank disappointed mortgage-holders and shocked market economists by opting to hold the cash rate at 3.85 per cent in a split decision.

Combined with moderating inflation, the unemployment figures meant an interest rate cut was “virtually locked in” when the Reserve meets in August, CreditorWatch’s chief economist, Ivan Colhoun, said.

Trading was calmer on Wall Street than on Wednesday when US President Donald Trump jolted financial markets by saying he had discussed the “concept” of firing the chair of the Federal Reserve but was unlikely to do so. Such a move could help Wall Street get the lower interest rates it loves, but would also risk a weakened Fed unable to make the unpopular moves needed to keep inflation under control.

Several better-than-expected reports on the US economy boosted trader sentiment.

The solid data could keep the Federal Reserve on pause when it comes to interest rates. The Fed’s chair, Jerome Powell, has been insisting that he wants to wait for more data about how Trump’s tariffs will affect the economy and inflation before the Fed makes its next move.

With AP, Bloomberg

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