Miners, energy players lift ASX higher after Wall Street rally

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

The numbers

The Australian sharemarket kicked off the week on a bright note, buoyed by a broad rally on Wall Street as a rise in iron ore prices drove mining stocks higher.

The S&P/ASX 200 closed 64.4 points or 0.8 per cent higher to 7,854.1 on Monday, with eight of 11 sectors in the green. Miners, energy and utilities players did the heavy lifting, while healthcare dragged on the index.

Wall Street ended the week with its best session in months. Credit: Bloomberg

The lifters

Strength in iron ore prices saw the miners rally: Fortescue finished 4.2 per cent higher, Rio Tinto added 1.8 per cent and BHP advanced 2.4 per cent.

Three of the big four banks finished in positive territory. ANZ rose by 1.4 per cent, CBA was up 1.6 per cent and Westpac rose 1 per cent. NAB shares closed 0.2 per cent lower after the bank announced two senior executives would depart the lender, with finance chief Nathan Goonan moving to Westpac and head of business banking Rachel Slade stepping down. Slade, who has been at NAB since 2017 and was seen as a contender to be CEO before the board opted for current chief Andrew Irvine, is leaving the bank in July.

Irvine also announced a new head of business and private banking to replace Slade: Andrew Auerbach, a Canadian bank executive who is currently chief executive of co-founder of Delisle Advisory Group. He previously spent more than two decades with BMO, a major Canadian bank.

A rise in oil prices boosted energy shares, with Woodside adding 1.9 per cent while Ampol rose 2.6 per cent. Santos was 0.8 per cent higher.

Tech shares were a mixed bag, despite a broad rally on Wall Street’s Nasdaq index and some early gains. Xero gained 1 per cent, but WiseTech fell 0.6 per cent.

The laggards

Telco company Spark New Zealand was the worst performer of the day, shedding 3.6 per cent. Its telco peer, Chorus, also dipped 2.7 per cent, while data centre operator NextDC fell 2.5 per cent.

Healthcare was the worst performing sector of the day, down 0.3 per cent, driven by CSL (down 0.9 per cent) and ResMed (down 1.3 per cent).

The lowdown

US President Donald Trump’s tariffs has acted as a trigger for a correction to US and global equity markets, which was looking “very expensive on most valuation metrics” anyway, according to Judo Bank economists.

“Many other nations’ equity prices have not fallen by as much as the US, but unfortunately, Australia’s major indexes are down about 8 per cent from the recent highs,” wrote Judo Bank chief economic advisor Warren Hogan and economist Matthew De Pasquale in a note.

“While parts of the Australian market could be considered ‘expensive’ and hence vulnerable to a short-term correction, there is also a growing concern about business profitability in Australia. Businesses across the economy still face elevated cost pressures but struggle to pass these on to customers, creating a squeeze on margins and profitability.”

Meanwhile, interest rate markets are pricing in at least two more rate cuts this year, with the cash rate looking like 3.5 per cent by the end of the year, they added.

On Friday, US stocks rallied to their best day in months as Wall Street’s rollercoaster suddenly shot back upward. That still wasn’t enough to keep the US market from a fourth straight losing week, its longest such streak since August.

The S&P 500 jumped 2.1 per cent a day after closing more than 10 per cent below its record for its first “correction” since 2023. The last time the index shot up that much was the day after President Donald Trump’s election, when Wall Street was focusing on the upsides of Trump’s return to the White House.

A multi-day “relief rally could be coming” after so much negativity built among investors, said Yung-Yu Ma, chief investment officer at BMO Wealth Management. Swings in sentiment don’t go full-tilt in just one direction forever, and the US stock market has been tumbling quickly since setting a record less than a month ago.

One piece of uncertainty hanging over Wall Street may be clearing after the Senate made moves to prevent a possible partial shutdown of the US government.

Past shutdowns have not been a huge deal for financial markets. But any reduction of uncertainty can be helpful when so much of it has been sending the US stock market on big, scary swings not just day to day but also hour to hour.

To be sure, the heaviest uncertainty remains with Trump’s escalating trade war.

While stock prices may be close to finishing their reset to account for tariffs set to hit in April, Ma said concerns about how big an impact cutbacks in federal spending will have on the economy are “likely to remain for some time.”

US households and businesses have already reported drops in confidence because of all the uncertainties created by Trump’s barrage of on -again, off -again tariff announcements and other policies. That’s raised fears about a pullback in spending that could sap energy from the economy.

Worries look to be only worsening among US households, according to a preliminary survey released Friday by the University of Michigan. Its measure of consumer sentiment sank for a third straight month, mostly because of concerns about the future rather than complaints about the present. The job market and overall economy look relatively solid at the moment.

Gains for Big Tech stocks and companies in the artificial-intelligence industry also helped support the market. Such stocks have been under the most pressure in the recent sell-off after critics said their prices shot too high in the frenzy around AI.

Nvidia rose 5.3 per cent to trim its loss for 2025 so far below 10 per cent. Apple climbed 1.8 per cent to pare its loss for the week, which at one point had been on pace to be its worst since the 2020 COVID crash.

Tweet of the day

Quote of the day

“We don’t want to dilute the experience, the product, the brand, by any new store.”

That’s El Jannah chief executive Brett Houldin, who is leading the breathless national expansion of Lebanese chicken shop chain that is in investment bankers’ sights and set to turn over up to $300 million this financial year. Here’s how they grew from a single outlet in western Sydney’s suburbs to a nationwide business with a target of 100 stores in two years.

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There are growing fears the US will drag the global economy into a recession after President Donald Trump imposed sweeping tariffs, including on Australian aluminium and steel, and announced widespread cuts to the US public service.

But AMP Bank, which is making a move into the small business lending sector, is optimistic that the fundamentals of the Australian economy are going to hold up.

“We’ve seen the Australian economy being resilient; we’ve seen consumers continue to be really resilient, which is fantastic. Obviously unemployment rates are really holding up, which is fantastic,” AMP Bank chief executive Sean O’Malley told this masthead.

With AP

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