Miners, tech, energy boost ASX after calmer trading on Wall Street

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

The numbers

Miners, tech and energy stocks helped the Australian sharemarket bounce back on Wednesday, following in the footsteps of Wall Street which calmed as US tech stocks climbed higher.

The S&P/ASX 200 finished the session 42.9 points or 0.5 per cent higher at 8416.9 points, as investors rushed back to the sectors initially smashed by Trump’s trade tariffs.

Wall Street advanced across the board.Credit: Reuters

The lifters

The winner of the day was wealth manager Insignia Financial, which finished 6.9 per cent higher after global asset management firm Brookfield offered to match the takeover bids of Bain Capital and CC Capital Partners at $4.60 per share, which values the company at $3.1 billion.

BWP Trust closed 4.9 per cent higher after the real estate investment trust reported double-digit total income growth and a 195 per cent jump in net profit for the first half. Neuren Pharmaceuticals rose 4.4 per cent.

The big miners were sharply higher, with BHP (up 1.5 per cent), Rio Tinto (up 2.1 per cent) and Fortescue (up 2 per cent) all solidly in the green.

The big four banks also advanced, led by NAB (up 0.7 per cent). CBA lifted 0.6 per cent, Westpac finished 0.5 per cent higher and ANZ added 0.1 per cent.

The laggards

“Millionaires factory” Macquarie Group found itself at the bottom of the bourse for most of the day with a 3.6 per cent loss. Pact Group and Orora both dipped 2.2 per cent.

Gourmet food business Maggie Beer Holdings initially rose 5 per cent but finished unchanged, following a trading update that revealed an organisational restructure which would see divisional heads report directly to the board.

The company is still searching for a new chief executive following the departure of Kinda Grange after just 18 months in the role. Unaudited total sales from continuing operations rose by around 6 per cent for the half-year.

The lowdown

Local investors followed Wall Street’s lead in shaking off trade tensions across Wednesday’s session, said Capital.com senior financial market analyst Kyle Rodda.

“Sectors of the market you’d expect to have taken a backward step from the imposition of retaliatory tariffs on the US by China have actually mostly outperformed, with the materials sector the big leader on the ASX200,” he wrote in a note.

“In saying this, gold stocks were the best industry within the sector as slightly lower yields and the US dollar added to the tailwinds provided by heightened geopolitical risk to gold. Meanwhile, energy stocks also enjoyed a Trump-bump as crude prices rose after the US president suggested tougher sanctions on Iran.”

Overnight, Wall Street was led higher by a strong profit report from Palantir Technologies, which is a key beneficiary of the artificial intelligence boom.

The company’s stock jumped 24 per cent and was one of the strongest forces lifting the S&P 500 after reporting a better profit for the latest quarter than analysts expected. The Denver company also issued forecasts for upcoming revenue that were ahead of analysts’ projections, as chief executive Alexander Karp said his company was at the “centre of the AI revolution.”

The S&P 500 rose 0.7 per cent a day after swinging sharply on worries that President Donald Trump’s tariffs could spark a trade war that would hurt economies around the world, including the United States. The Dow Jones added 0.3 per cent, and the Nasdaq composite climbed 1.4 per cent.

Trump has agreed to delay his taxes on US imports of Canadian and Mexican products for a month, with the announcement on Canada coming after trading closed for the day. That bolstered Wall Street’s long-standing hopes that Trump’s tough talk on tariffs may be just that – talk. The hope is that Trump sees tariffs as a stick he can use in negotiations with trading partners rather than as a long-term policy.

That hope is built in part on traders’ belief that Trump would be likely to be turned off by the damage Wall Street would take if a worst-case, long-term trade war were to occur. Trump has previously pointed to the sharemarket as a real-time measure of his performance.

But a trade war is still possible, and some analysts say more swings may be coming because Trump’s threats should be taken both seriously and literally.

“Investors have suggested the equity market is the US administration’s scorecard, and any policy changes that hurt risk assets will be quickly dialled back,” Bank of America strategists led by Mark Cabana wrote in a BofA Global Research report. “We advise caution.”

They say a big takeaway from all the tariff tumult is that the Trump administration is transactional, and “nothing is settled until it is final.”

Trump is pressing ahead with a 10 per cent tax on US companies importing goods from China. And China retaliated on Tuesday by announcing its own tariffs on some US products, and an antitrust investigation into Google.

But the 15 per cent tariff on US coal and liquefied natural gas products, as well as a 10 per cent tariff on crude oil, agricultural machinery and large-engine cars imported from the United States, won’t take effect until Monday. That leaves time for negotiations between Trump and Chinese President Xi Jinping.

Some on Wall Street also see tariffs on China as separate from Trump’s moves against other trading partners. Trump may be more likely to keep tariffs on China for the longer term, as he did in his first term, because of a desire to separate the United States more from its geopolitical rival.

Outside of China, the result of all this tumult for Canada, Mexico, the European Union and other US allies is more likely to be concessions and not tariffs, according to Thierry Wizman, a strategist at Macquarie.

The stock price of Google’s parent company, Alphabet, rose 2.5 per cent even with China’s antitrust investigation. The company released its latest earnings report after trading ended for the day.

Tweet of the day

Quote of the day

“Managing director’s office just sent me this. I think we have a problem.”

That’s ABC’s then-content chief Chris Oliver-Taylor, who described complaints about Antoinette Lattouf as “hugely problematic”. Lattouf’s unlawful termination case against the public broadcaster continues in Sydney, and is a full day behind schedule. Read more from media writer Calum Jaspan.

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Within the seemingly endless stream of executive orders that US President Donald Trump has been signing since taking office just over a fortnight ago is one directing his officials to create a sovereign wealth fund. What he left unanswered, though, is whether America actually needs a sovereign wealth fund, and how it would finance one.

In his order signed on Monday, Trump said it was in the interests of Americans to establish a fund to “promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish economic security for future generations and promote United States’ economic and strategic leadership internationally”. Read more from senior business columnist Stephen Bartholomeusz.

With AP

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