ASX gains after mega-caps boost Wall Street; Bitcoin rises after SEC decision

Welcome to your five-minute recap of the trading day, and how experts saw it.

The numbers

Tech stocks lifted the Australian sharemarket on Thursday, tracking the gains on Wall Street, which was also driven higher by gains in mega-cap stocks such as Amazon, Microsoft and Nvidia.

Wall Street closed higher as some mega-cap stocks advanced.Credit: Reuters

The S&P/ASX 200 finished 37.5 points, or 0.5 per cent, higher at 7506, with a mixed day of trading. Six out of 11 sectors finished in the green, four finished virtually unchanged, and only utilities slumped (down 0.23 per cent).

The lifters

Tech stocks (up 1.2 per cent) led the local bourse on Thursday, followed by financials (up 1.1 per cent). The Australian dollar traded slightly higher at 67.22 US cents.

South32 was the strongest performing large-cap stock, its shares soaring 5.03 per cent, followed by JB Hi-Fi (up 3.8 per cent) and Mercury NZ (up 2.5 per cent).

Mega-cap tech stocks Wisetech (up 1 per cent), NEXTDC (up 2.1 per cent), Xero (up 0.8 per cent) and Altium (up 2.1 per cent) finished firmly in the green. In the financials sector, while insurance stocks fell, all four major banks as well as Macquarie finished higher.

Meanwhile, Bitcoin traded 2.1 per cent higher at $US46,657 at lunchtime after the US regulator green-lit the launch of spot bitcoin exchange-traded funds, letting retail investors invest in the cryptocurrency without needing to manage crypto keys, bitcoin wallets or interact with unregulated exchanges.

The New York Stock Exchange, Nasdaq and Cboe Global Markets have received permission to list the spot-bitcoin ETFs, opening the door to investors begin trading as soon as Thursday (Friday AEDT).

The laggards

Gold miner Newmont recorded the worst slump among large-cap stocks as its shares tumbled 2.2 per cent, followed by Whitehaven Coal (down 2.1 per cent). Worley, which fell almost 5 per cent intraday, pared back those losses and finished the day 2 per cent lower.

The engineering contractor came out of a trading halt just 30 minutes before the end of Wednesday’s trade amid corruption allegations in Ecuador.

Worley told the market just before Christmas that it lost a case against Ecuador in the international arbitration tribunal, but failed to disclose it had been dismissed because the tribunal found the company engaged in a “widespread pattern of illegality and bad faith”. Worley has denied the allegations.

In commodity news, Brent crude recorded another day of losses, falling 1 per cent to $US76.78 a barrel, and iron ore slipped 4 per cent to $US132.30 a tonne. The energy sector on the ASX was up 0.03 per cent while mining gained 0.1 per cent.

Woodside, which lifted 0.87 per cent, largely offset the losses from mega-cap energy stocks, while lithium miners ofsset losses from iron ore heavyweights BHP (down 0.1 per cent), Fortescue (down 1.9 per cent) and Rio Tinto (down 0.4 per cent).

The lowdown

On Wall Street, the Dow Jones Industrial Average closed 0.45 per cent higher at 37,695.73 while the S&P 500 rose 0.3 per cent and the Nasdaq Composite climbed 0.75 per cent. The Australian dollar traded largely unchanged at 66.97 US cents.

Microsoft, Alphabet and Amazon.com rose between 0.9 per cent and 1.9 per cent as the yield on the benchmark 10-year note inched lower ahead of a highly anticipated government bond auction.

Megacap stock Nvidia gained 2.3 per cent to hit a record high after TSMC, the world’s largest contract chipmaker, beat fourth-quarter revenue expectations, while Facebook’s owner Meta Platforms climbed 3.7 per cent to a more than two-year high.

Gains in equities have remained limited on Wall Street since the turn of the year as expectations of early rate cuts, which had driven much of the rally towards the end of 2023, scaled down following contrasting economic data and mixed signals from Federal Reserve officials.

In the Australian market, the ASX ended the previous session firmly in the red despite a brief uptick following a report that showed inflation had slowed to the lowest rate since January 2022. The S&P/ASX200 dropped 52 points, or 0.7 per cent, to 7468.5 at the close as miners, utilities and consumer staples dragged the index lower.

All eyes are now on US consumer and producer inflation reports for December, which could help determine the monetary policy trajectory for the US central bank. Investors will also closely monitor comments by New York Fed president John Williams, who is scheduled to speak later in the day.

Skyler Weinand, chief investment officer at Regan Capital, believes any strong surprise on the inflation front in the US may cause bond and equities to sell off.

Market participants on Wall Street have scaled back expectations for at least a 25-basis-point rate cut in the world’s largest economy in March, and see a near 67 per cent chance, down from around 86 per cent in the final week of 2023, as per the CME FedWatch Tool.

On Friday, banking giants JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are expected to report lower fourth-quarter profits.

“Banks are going to be in a very large hole for at least the next two years, unless yields drop tremendously,” Weinand added.

The lenders slipped between 0.8 per cent and 1 per cent overnight, pushing the S&P 500 bank index to a one-week low.

Boeing rose 0.9 per cent, recovering from a 9.3 per cent tumble in the last two sessions. CEO Dave Calhoun acknowledged errors by the US plane maker as more than 170 jets remained grounded for a fourth day.

Tweet of the day

Quote of the day

“[Since] October 7 and the ensuing conflict in the Middle East, it has become notorious in the media industry that Arab and Muslim journalists are being intimidated, censored and sacked,” employment lawyer Josh Bornstein said of ABC’s decision to sack Antoinette Lattouf three days into a short-term contract in December.

“In this case we will show that the ABC has not sacked white journalists for expressing political opinion even where those journalists worked in news and current affairs.”

You may have missed

Aristocrat Leisure has won urgent orders stopping its head of game design from using any of the 6800 files he allegedly downloaded from the group’s servers.

With Reuters

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.