ASX gains for a fourth session, led by energy and tech stocks

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

The numbers

The Australian sharemarket pushed past the 8000-mark in Tuesday’s session, rising for a fourth straight day to an eight-week high after a late wave of buying sent Wall Street to its longest advance since November.

The S&P/ASX 200 rose 73.50 points, or 0.9 per cent, to 8070.60, the highest since early March, with all 11 industry sectors advancing except for consumer staples, which treaded water. Real estate investment trusts, miners, energy, tech and financial stocks led the uptick as investors looked past recent market volatility to wade back into shares. The Australian dollar softened to $US64.21¢.

The Australian sharemarket closed higher for a fourth straight session.Credit: Louie Douvis

The lifters

Australia’s mining heavyweights and financial stocks, which together make up more than half of the local bourse and thus have an outsized influence on its direction, powered the market gains.

Iron ore giants BHP, Fortescue Metals and Rio Tinto rose 1.4 per cent, 5.8 per cent and 1.4 per cent respectively, amid continuing hopes of a de-escalation in the trade war between the world’s two largest economies. China is Australia’s biggest buyer of the metal. Fortescue’s shares were also boosted by a trading update, in which the miner said it shipped 46.1 million tonnes of iron ore in the March quarter, taking its shipments for the first nine months of its financial year to a record, and predicted full-year shipments of up to 200 million tonnes.

Embattled miner Mineral Resources rallied 13.2 per cent despite an underwhelming trading update, trimming its share price losses since the start of the year to 40 per cent. Its board reiterated its vow to improve corporate governance after the company’s offshore tax scandal, with a new chair to be announced by the end of June.

The big four banks also advanced, though they pared back some of their early gains in the afternoon. Commonwealth Bank, the largest stock on the ASX, edged up 0.1 per cent. Westpac rose 1.1 per cent, while National Australia Bank and ANZ Bank rose 0.7 per cent and 0.8 per cent, respectively.

Real estate stocks climbed, with investors piling into the interest-rate sensitive sector before Wednesday’s release of inflation figures, which will be closely watched by the Reserve Bank in its rate decision early next month. Data centre and warehouse owner Goodman Group jumped 1.6 per cent, while shopping centre landlords Scentre and Stockland both closed 0.9 per cent higher.

Tech stocks were also stronger, sending WiseTech Global up 1.5 per cent, while accounting software maker Xero rose 1.1 per cent and family member tracking app Life360 climbed 3.5 per cent.

But it was energy stocks that led the day’s gains as oil prices steadied after a recent drop, with signs of strain in the US economy amid the brewing trade war and talks with Iran on its nuclear program in focus.

Australia’s biggest oil and gas producer, Woodside, rose 1.5 per cent after making its final investment decision on a $17.5 billion ($27.4 billion) liquefied natural gas export project in the US, cementing its position as a top supplier of the fuel. The approval clears the way for large-scale construction of the Louisiana LNG export plant. Smaller rival Santos gained 1.8 per cent, while the nation’s biggest refiner, Ampol, added 2.7 per cent. Coal producers Whitehaven Coal and Yancoal gained 4.7 per cent and 1.8 per cent, respectively.

Endeavour shares rose 0.5 per cent. The retailer and hotel owner, which runs the bottle shop chains Dan Murphy’s and BWS, said this morning that former Virgin chief executive Jayne Hrdlicka will become its new boss from January 1, with executive chairman Ari Mervis continuing in his role until then.

The laggards

Consumer staples were the only sector to tread water in the broad-based market rally as the defensive sector with its recurrent earnings stream failed to excite investors.

Woolworths, the nation’s biggest supermarket, slipped 0.3 per cent and its arch rival Coles ended unchanged. Dairy company A2 dropped 1.3 per cent.

The lowdown

Some calmness has returned to financial markets in the past week, with the softer tones coming from the White House after the Trump administration’s trade policies had sparked volatile trading in stocks and bonds and prompted traders to sell American assets, including the US dollar.

“You have to be a bit more careful when it comes to how to position the portfolio at the moment,” Ken Wong, Asian equity portfolio specialist at Eastspring Investments, said in a Bloomberg Television interview.

“Every single day we’ve been getting conflicting news around what’s happening around tariffs. So as a result, we have to take a bit more of a wait-and-see approach.”

However, amid rising optimism that Trump will soften his trade war against the rest of the world, investors have started to wade back into the market and buy shares at their reduced prices following the recent market sell-down.

“Four more sleeps to go before the Australian federal election, and while the polls and betting agencies suggest Labor will win, those who bought the dip into shares are winning regardless,” Moomoo market strategist Jessica Amir said, pointing to the recent gains since the market’s low point on April 7.

On Monday, US stocks drifted to a mixed finish, ahead of potential flashpoints later this week that could bring more sharp swings for financial markets. The S&P 500 inched up by 0.1 per cent to extend its winning streak to a fifth day. The Dow Jones Industrial Average added 0.3 per cent, while the Nasdaq composite slipped 0.1 per cent.

The relative lull in trading offered a respite from the sharp, historic swings that have rocked markets for weeks, as hopes rose and fell that President Donald Trump may back down on his trade war. Many investors believe Trump’s tariffs could cause a recession if left unaltered. Coming into Monday, the S&P 500 had roughly halved its drop that had taken it nearly 20 per cent below its record set earlier this year.

Mixed trading for some influential tech stocks ahead of their earnings reports this week pulled the S&P 500 back and forth between modest gains and losses for much of the session overnight.

Amazon fell 0.7 per cent, Microsoft dipped 0.2 per cent, Meta Platforms added 0.4 per cent, and Apple rose 0.4 per cent. All are set to report their latest result this week, and they’re some of Wall Street’s most influential companies because they’ve grown to become some of the biggest in terms of size, by far. That gives their movements extra weight on the S&P 500 and other indexes.

A fear is that Trump’s on-again-off-again tariffs may be pushing households and businesses to alter their spending and freeze plans for long-term investment because of how quickly conditions can change, seemingly by the hour.

So far, economic reports have mostly shown that the US economy is still growing, though at a slower pace. On Wednesday, economists expect a report to say US economic growth slowed to a 0.8 per cent annual rate in the first quarter of this year, down from a 2.4 per cent pace at the end of last year. They also expect a slowdown in hiring to 125,000 from 228,000 in March.

With AP, AAP, Bloomberg

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