- Updated
- Business
- Markets
- World markets
ASX closes higher; Bitcoin hits record high
By Angus Delaney
Welcome to your five-minute recap of the trading day.
The numbers
Australia’s sharemarket closed higher on Thursday after ballooning gold and iron ore prices pushed up the materials sector.
The S&P/ASX 200 rose 50.6 points, or 0.6 per cent, to 8589.2, with seven of 11 industry sectors in the green. The broader All Ordinaries gained 48.8 points, or 0.6 per cent, to 8826.7. The Australian dollar was fetching US65.56¢,from US65.2¢ at midday on Wednesday.
The ASX opened higher on Thursday. Credit: Dominic Lorrimer
The lifters
Increases to iron ore prices benefited the materials sector to the tune of 1.2 per cent. This drove increases to iron ore giants BHP, Fortescue and Rio Tinto, which rose 1 per cent, 2 per cent and 1.2 per cent, respectively.
Surging gold prices boosted miners Evolution, up 3.6 per cent, Newmont, up 3.2 per cent, and Perseus, up 3.2 per cent.
Newmont’s Cadia gold mine in Orange. Credit: Getty Images
The real estate sector increased 1 per cent, after two days of decline following the Reserve Bank’s surprise decision to hold interest rates steady. Scentre was up 1 per cent and Goodman Group and Stockland advanced 0.9 per cent each.
Financials made more modest gains, up 0.7 per cent, with Commonwealth Bank – the index’s largest stock – advancing 0.8 per cent. Westpac (up 0.5 per cent), National Australia Bank (up 1.1 per cent) and ANZ (up 0.8 per cent) rounded out the positive moves for bank shares.
Bitcoin hit an all-time high of $US112,000 ($170,878). Rachael Lucas, a crypto analyst at BTC Markets, said, “geopolitical uncertainty and Trump’s revived call for aggressive interest rate cuts have increased demand for risk assets”. Other analysts have said geopolitical instability has instead pushed investors towards haven assets such as gold and blue-chip stocks.
The laggards
Biotech behemoth CSL declined 0.5 per cent, after US President Donald Trump threatened that foreign pharmaceutical companies could face tariffs of 200 per cent in the next couple of years.
“We’re going to give [drug manufacturers] about a year, a year-and-a-half to come in, and after that, they’re going to be tariffed,” Trump said. “They’re going to be tariffed at a very, very high rate, like 200 per cent.”
Origin Energy declined slightly after surging earlier this week.Credit: Bloomberg
Telix Pharmaceuticals fared worse, down 3.6 per cent, and Ramsay Health Care fell 3.1 per cent as the healthcare sector sagged 0.5 per cent.
Bucking the trend was medical imaging company Pro Medicus, which advanced 1.5 per cent and continued its strong performance, with its share price up more than 130 per cent in the past year.
Plumbing company Reece declined 3 per cent as its share price continues to fluctuate after plunging more than 18 per cent last month on the back of a profit downgrade.
The lowdown
Investors are “shrugging off” any news regarding Trump’s tariffs, said Bell Direct market analyst Grady Wulff.
“To be honest I think everyone’s kind of sick of it with hearing these astronomical numbers like 200 per cent tariff on healthcare and 50 per cent tariff on copper and I think markets have already factored in the worst-case scenario,” she said.
Grady said investors were eagerly looking forward to a rate cut, after the Reserve Bank held rates at its meeting this week, and were no longer concerned with how tariffs could affect the market.
This could help explain why pharmaceutical company CSL (the main Australian company that would suffer if Trump imposed his proposed 200 per cent tariff) declined just 0.5 per cent on Thursday.
“The company itself is a phenomenal company and if anything they’ve got they do have production facilities in the US so they’ll just up their production in the US to kind of counteract this tariff,” said Grady.
Wednesday was initially set as a deadline by Trump for countries to make deals with the US or face heavy increases in tariffs. But with just two trade deals announced since April, one with the United Kingdom and one with Vietnam, the window for negotiations has been extended to August 1.
This latest phase in the White House’s trade war heightens the threat of potentially more severe tariffs that’s been hanging over the global economy. Higher taxes on imported goods could hinder US economic growth, if not increase recession risks.
Financial markets swooned from day to day for weeks after the White House rolled out its proposed tariff hikes in the spring. With the new batch of US taxes on imports not set to kick in until next month, that gives Wall Street a breather just as the next corporate earnings season is set to begin.
Nvidia became the first company to be valued at $US4 trillion ($6.1 trillion).Credit: AP
“I think most people are tired of tariff news, and they’re starting to realise it just doesn’t matter much,” said Jay Hatfield, chief of Infrastructure Capital Advisors. “We’re pretty bullish about earnings. I think the rest of the market is, too.”
On Wall Street, the S&P 500 rose 0.6 per cent to post its first gain this week. The gain was good enough to nudge the index past the record high it set last Thursday.
Nvidia rose 1.8 per cent and became the first public company to exceed $US4 trillion ($6.1 trillion) in value after its share price briefly topped $US164 each in the early going. Shares in the AI boom poster child were going for around $US14 per share at the start of 2023.
“Nvidia’s ascent pass the US$4 trillion mark highlights that demand for computing infrastructure remains resilient despite concerns around the sustainability of current capital expenditure plans,” said Hugh Lam, investment strategist at Betashares.
The tech rally in the US came as Wall Street continued to weigh the latest developments in Trump’s renewed push this week to use threats of higher tariffs on goods imported into the US in hopes of securing new trade agreements with countries around the globe.
With AP
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.