Miners, tech stocks buoy ASX after Tesla boosts Wall Street

Welcome to your five-minute recap of the trading day.

The numbers

Miners and tech stocks drove the Australian sharemarket higher on Wednesday after two days of losses, helped along by a positive lead from Wall Street, which hit a record high overnight.

The S&P/ASX 200 Index rose 21.7 points, or 0.3 per cent, to 7739.9 at the close, with seven out of the 11 sectors trading in the green. The Australian dollar was stronger, fetching US66.72¢.

Tesla boosted the market on Tuesday.Credit: Bloomberg

The lifters

The mining sector (up 1 per cent) was among the strongest sectors on the local bourse, with iron ore heavyweights BHP (up 1.1 per cent) and Fortescue (up 1.6 per cent) climbing, along with Rio Tinto (up 1.2 per cent). Mineral Resources (up 2.9 per cent) and Lynas Rare Earths (up 3.6 per cent) were also among the biggest large-cap advancers.

Coal miners Yancoal (up 2.1 per cent) and Whitehaven (up 3.8 per cent) declined in early trade but surged again by midday, continuing rallies following news of a fire at one of competitor Anglo American’s Australian coal projects on the weekend.

Utilities player Mercury NZ (up 3.9 per cent) was the biggest large-cap advancer, while WiseTech (up 1.9 per cent) helped push the tech sector (up 1.2 per cent) higher.

The laggards

Meanwhile, financials (down 0.5 per cent) and utilities (down 0.8 per cent) were the weakest sectors, with Suncorp falling 2.3 per cent, IAG dropping 1.7 per cent and Origin Energy losing 1.4 per cent. Medical equipment supplier EBOS Group (down 3.4 per cent), Seek (down 2.7 per cent) and CAR Group (down 1.8 per cent) were among the biggest large-cap decliners.

The big four banks all traded lower with the country’s biggest bank, CBA, closing 0.2 per cent lower. Energy giants Woodside (down 0.2 per cent) and Santos (down 0.1 per cent) were also weaker.

The lowdown

Capital.com senior financial analyst Kyle Rodda said the ASX edged higher with continued outperformance from the energy sector and a bounce in the miners driving the gain.

Rodda said Australian retail sales, as reported by the Australian Bureau of Statistics, came in stronger than expected. While the latest print helped to wind back early losses in the consumer discretionary sector, Rodda said the number did little to move rate expectations and the markets.

“In the bigger picture, retail activity remains soggy amidst an ailing household sector,” he said. “When it comes to the ASX 200, it remains range bound and consolidating.”

Overseas, Tesla zoomed higher and helped drive the US sharemarket to more records on Tuesday in New York.

The S&P 500 added 0.6 per cent to top its all-time high set two weeks ago. The Dow Jones rose 0.4 per cent, and the Nasdaq composite added 0.8 per cent to its own record set a day before.

Tesla led the way with a 10.2 per cent jump after the electric vehicle maker reported a milder drop in sales than analysts expected. Modest gains for other big, influential stocks also helped lift the market, including a 1.6 per cent climb for Apple.

Stocks had a lift from easing Treasury yields after the head of the Federal Reserve made comments that investors took as a signal for possible cuts to interest rates later this year. Fed chair Jerome Powell, whose utterances are always finely parsed for hints about rates, gave a nod to improvements in inflation data after some disappointingly high readings early in the year.

Wall Street had a lift after Federal Reserve chair Jerome Powell made comments that investors took as a signal for possible cuts to interest rates later this year.Credit: AP

“We just want to understand that the levels that we’re seeing are a true reading of underlying inflation,” he said.

The hope on Wall Street is that inflation will slow enough to convince the Fed to lower its main interest rate, which has been sitting at its highest level in more than two decades and pressing the brakes on the economy. Treasury yields have largely been easing since April on hopes for such cuts.

A report on Tuesday may have hindered those hopes, though. It showed US employers were advertising more job openings at the end of May than economists expected and slightly more than April’s tally. While plentiful job openings are great news for workers, the fear on Wall Street is that too strong of a job market will put upward pressure on inflation and force delays to rate cuts.

After swinging lower following Powell’s comments, Treasury yields pared their losses following the report on job openings. The yield on the 10-year Treasury was sitting at 4.42 per cent, compared with 4.46 per cent late Monday.

The week’s most anticipated economic data will arrive on Friday, when the US government reports how many jobs employers added during June. Before then, the US sharemarket will have a shortened trading day on Wednesday and a holiday on Thursday for the Fourth of July.

In commodities markets, the price of benchmark US oil ended up slipping modestly after touching its highest price since April earlier in the morning.

Tweet of the day

Quote of the day

“[The] investment metrics displayed by recent sales activity support a softening in office market valuations,” said Dexus chief executive Ross Du Vernet as office property values in Australia plunged more than 10 per cent in the past six months.

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With AP

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