Mining and energy stocks boost ASX despite Big Four drag

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

The numbers

The ASX finished higher on Friday after a choppy start to trading, ultimately pushed up by rising commodity prices and positive economic data out of the US.

The S&P/ASX 200 gained 24.2 points, or 0.3 per cent, to 8099.9 at the close, though only five of the 11 industry sectors rose. The index had earlier hit a six-week high of 8143.6 points but cooled off at the end on weaker banks.

Relative calm has returned to global markets.Credit: AP

The lifters

The mining sector enjoyed the greatest growth on the back of robust commodity prices: iron ore rose 2.5 per cent to $US95.05 a tonne, uranium and lithium also soared, while spot gold prices hit another record high, up 1.6 per cent to $US2552.34/oz as investors speculate over an impending rate cut from the US Federal Reserve.

Sector heavyweights BHP and Rio Tinto rose 2 and 0.9 per cent, respectively, while Fortescue soared 5 per cent to sit among the biggest large-cap gainers at the close.

Miners also dominated the rest of the large-caps, with Evolution Mining jumping 7.2 per cent and Northern Star Resources lifting 4.1 per cent. The energy sector also grew as the price of Brent crude rose 2.3 per cent to $US72 a barrel, driven higher after Hurricane Francine hit oil production in the Gulf of Mexico, compromising supply.

The Australian dollar rose overnight. It was fetching 67.32 US cents at 11am AEST.

The laggards

On the flipside, finance stocks dragged the local sharemarket with all four big banks retreating: Commonwealth Bank fell 0.9 per cent, Westpac dipped 0.6 per cent, ANZ lost 0.5 per cent and NAB dropped 1.2 per cent.

The biggest large-cap losers on Friday were employment platform Seek (down 2.6 per cent), Treasury Wine Estates (down 2 per cent) and medical device company Resmed (down 1.9 per cent).

The lowdown

Moomoo market strategist Jessica Amir said commodities were the standout on Friday, as well as for the week more broadly.

She said “green” commodities – meaning those pivotal to the energy transition, such as lithium and uranium – got attention this week after both US presidential candidates discussed the green energy transition at the presidential debate.

Separately, Russian President Vladimir Putin flagged on Thursday that he was considering limiting uranium exports, raising supply concerns.

“We know Russia is a pretty big producer and seller of uranium to the world so that basically means you might expect higher prices because we could get a squeeze on supply in uranium, and it comes at the same time as we’re speaking about a squeeze in lithium as well,” Amir said.

The impending US central bank meeting – one of the most important in years, she said – was also having a big impact on gold prices, as well as in the broader market.

“We’ve got gold hitting a brand-new record, all-time high today … Every time the Federal Reserve cuts interest rates, gold traditionally rallies,” she said.

“It’s very normal to see profit taking ahead of such a big, pivotal decision next week … Some people might be buying earlier in the week, and then they’re selling after they get those profits.”

“[And] September is historically the most volatile and traditionally the worst month for equities.”

US stocks pulled closer to their records on Thursday, following a couple of reports on the economy that came in close to expectations.

The S&P 500 rose 0.7 per cent and climbed back within 1.3 per cent of its record set in July following a shaky summer. It remains on track for a fourth winning week in the last five.

The Dow Jones added 235 points, or 0.6 per cent, and the Nasdaq composite gained 1 per cent.

Nvidia was the strongest force on Wall Street, lifting the S&P 500 and rose another 1.9 per cent to bring its gain for the week to nearly 16 per cent. The chip company’s stock has stabilised recently after falling more than 20 per cent during the summer on worries investors had taken it too high in their frenzy around artificial-intelligence technology.

Treasury yields held relatively steady in the bond market following reports on layoffs and inflation that included few surprises. The data did little to change the overriding belief in the market that the US economy is slowing, along with inflation, and that the Federal Reserve will cut interest rates next week in hopes of protecting the job market and preventing a recession.

Tweet of the day

Quote of the day

“Medibank was a monster data breach, and data breaches have rightly become a big area of focus. But in terms of the next phase, the next threat, I’m someone who tends to be optimistic, but I’m a little bit gloomier looking forward,” UK chair of Australian cybersecurity firm CyberCX, Ciaran Martin, said of potentially worsening cyberattacks.

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with AP

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