ASX 200 up 0.3pc; Wall St, Nikkei claws back some losses; gold price dips

Local shares extend gains for a second day, with nearly all 11 sectors in the black. Property and energy stocks found strong support following a rebound in the US. Nikkei up 4.3 per cent on Bank of Japan news it won't raise rates while markets unstable.

The ASX is recovering for a second day in a row after strong rebounds in Japanese and US markets. Picture: Kazuhiro Nogi/AFP

Welcome to the Trading Day blog for Wednesday, August 7. The ASX 200 has rebounded from early falls to a two-day-high, closing 0.3 per cent higher at 7699.8, with gains across the board. Property and energy stocks led the gains.

The Aussie dollar is trading around US65.42c.

Updates

4:55 pm August 7, 2024

ASX 200 ends up 0.3pc as BoJ backs off

David Rogers

Australia's stock market rose slightly for a second day running as the Japanese and US markets continued to recover from sharp falls in recent days.

The S&P/ASX 200 index closed up 0.3 per cent at 7699.8 after rising to 7738.2.

The rebound came as the Japanese yen fell about 2 per cent, sparking a 4.5 per cent intraday lift in the Nikkei 225 and a 1 per cent rise in S&P 500 futures.

Offshore markets rose as BoJ deputy governor Uchida said the BoJ won’t press ahead with rate hikes while markets are “extremely volatile.”

The Nikkei 225 closed up 2.5 per cent and S&P 500 futures were up 0.5 per cent in late APAC trading, pointing to a further cautious rebound in the US market.

Nine of 11 ASX 200 sectors rose with property, communications, utilities, industrials, health care and tech outperforming.

GPT Group rose 3.4 per cent and Telstra rose 1.3 per cent as Goldman Sachs predicted a solid FY24 result and improved FY25 guidance from the telco next week.

But the major banks lost group with Westpac down 0.7 per cent as JP Morgan downgraded to Underweight.

Big iron ore miners fell with Rio Tinto down 1.4 per cent as iron ore futures fell about 1 per cent to $US101.40. James Hardie fell 2.3 per cent.

4:32 pm August 7, 2024

OTR push to expose groups behind alleged smear

Giuseppe Tauriello

The identities of groups behind an alleged smear campaign against OTR are likely to be revealed to the petrol and convenience store giant within days, but will be shielded from the public ahead of a potential Federal Court trial.

OTR commenced court proceedings against influential public relations and lobbying firm The Civic Partnership in March, over claims one of its senior executives set up fake social media identities to damage the reputation of the company while it was defending a multimillion-dollar underpayment class action.

This week, Federal Court judge Patrick O’Sullivan ordered that documents confirming the identity of clients who engaged The Civic Partnership to undertake the campaign be provided to OTR as part of a pre-trial discovery process.

The Civic Partnership has been given seven days to provide a list of documents that discloses the terms of any retainer or scope of engagement between the PR firm and its clients, the instructions given by the clients to undertake the campaign, and any records of payments made by the clients to The Civic Partnership.

3:17 pm August 7, 2024

Allens work for Super Retail under fire

Eli Greenblat

Counsel for former Super Retail Group chief legal officer Rebecca Farrell has raised the prospect of solicitors for the retailer, prestigious law firm Allens, being disqualified from acting for the retail chain amid the growing courtroom battle surrounding the company.

Ms Farrell’s lawyer raised the issue before Federal Court justice Michael Lee as the court heard arguments around the court case that has sprung from the sacking of Ms Farrell and her whistleblower case against Super Retail, the owner of Rebel, Supercheap Auto, BCF and Macpac.

Earlier counsel for Super Retail told the Federal Court it is seeking to disqualify the high-profile solicitors acting for sacked Super Retail chief legal officer Ms Farrell. Ms Farrell is represented by workplace specialist law firm Harmers, which has a reputation for taking on cases around sexual harassment and bullying in the workplace.

2:54 pm August 7, 2024

Super Retail wants Farrell's solicitors dumped

Eli Greenblat

Counsel for Super Retail Group has told the Federal Court it is seeking to disqualify the high-profile solicitors acting for sacked Super Retail chief legal officer Rebecca Farrell.

Ms Farrell is represented by workplace specialist law firm Harmers, which has a reputation for taking on cases around sexual harassment and bullying in the workplace.

Matthew Follett SC, appearing for Super Retail, has told Federal Court justice Michael Lee that Harmers had communications with the media over the case and Ms Farrell’s whistleblower claims which led to Ms Farrell’s employment being terminated.

Mr Follett SC told the Federal Court the law firm Harmers later sought protections from defamation as it worked on an alleged settlement between Ms Farrell and Super Retail.

That settlement and if it was agreed to by the parties is currently under dispute.

2:46 pm August 7, 2024

Super Retail court battle kicks off

Eli Greenblat

Lawyers for sacked former legal chief of Super Retail Group, Rebecca Farrell, has told the Federal Court a settlement between Ms Farrell and the retailer had been reached, but that deal was later “repudiated” by the company.

Appearing before Justice Michael Lee of the Federal Court in Sydney, counsel for Ms Farrell set out some early case management issues as the former chief legal officer of Super Retail seeks to enforce the settlement and make whistleblower claims about improper workplace behaviour.

The allegations include bullying, harassment and an alleged affair between Super Retail chief executive Anthony Heraghty and former Super Retail head of HR, Jane Kelly.

1:58 pm August 7, 2024

ASX 200 rises 0.6pc amid global rebound

David Rogers

Australia's stock market continues to rebound after the Bank of Japan showed its sensitivity to the savage bear market in Japanese stocks in recent weeks.

The ASX 200 jumps 0.6 per cent to a two-day high of 7727 as S&P 500 futures rise 0.9 per cent after the Nikkei 225 rose 3.5 per cent on a 2.2 per cnet intraday rise in USD/JPY after dovish comments from BoJ deputy governor Uchida.

Uchida acknowledged the recent volatility in Japanese markets, saying the BOJ’s rate path will shift if there’s an impact on the policy outlook.

Markets partly anticipated this dovish pivot by the BoJ on Tuesday when the Nikkei 225 rose 10 per cent after diving 12.4 per cent Monday as carry trades were cut.

1:43 pm August 7, 2024

Aussie bank earnings 'immune' to offshore jitters: JPM

David Rogers

J.P. Morgan's Andrew Triggs thinks Australian banks are "likely to be largely immune" from recent jitters about the US economic and interest rate outlook, as well as the recent "unwind" of Yen carry trades that pummelled stocks on Monday.

He points out that the US accounts for only 5 per cent of Australia’s exports and rapid RBA rate cuts are unlikely as its cash rate its much lower than Fed funds.

"Indirect impacts are more likely, with transmission through credit spreads to wholesale funding costs, and lower swap rates reducing hedge benefits," Mr Triggs says. "Our house economics view remains a relatively soft landing in Australia.

ANZ shares were last up 0.6 per cent at $27.47.

Westpac was down 0.1 per cent at $27.78.

1:36 pm August 7, 2024

J.P. Morgan switches pecking order on banks

David Rogers

J.P. Morgan upgrades ANZ to Neutral and cuts Westpac to Underweight, while keeping its price targets unchanged at $27 and $25 after recent share price moves.

Negative catalysts for ANZ including its exposure to US/NZ rate cuts and its Markets conduct issues "now look to be factored into its valuation", says JPM analyst Andrew Triggs.

Westpac "does not appear rich in negative near-term catalysts", but has "significantly outperformed the other banks this year, and valuation is now very stretched".

NIM outperformance versus peers is likely for Westpac in 2H24, but RBA rate cuts would impose pressure given its retail deposit franchise, and replicating portfolio tailwinds are short-dated, Mr Triggs says.

12:12 pm August 7, 2024

Too soon to gauge Google cases impact: UBS

Joseph Lam

Analysts say it’s too early to understand the full impact of Google’s antitrust case loss, and therefore they cannot update their estimates for the company.

While the case had been "a widespread topic of investor conversation for some time", it could take up to a year before Google is forced into any further action by the court, analysts from UBS said.

"What we have from the decision is just the headline that Google has been deemed a monopolist, we may not know for some months (potentially 6-12 months) what next steps Judge Mehta will take as a remedy to effect change, as this process will also require another trial," they said.

"In our view the headlines and other available information as of yet do not place us in a position where we can with any confidence project the ultimate impact on Google's P&L."

UBS's price target remains at $US204 ($311.69) per share.

12:04 pm August 7, 2024

Spartan stake gives 'seat at the table': Ramelius boss

Bridget Carter

Ramelius Resources boss Mark Zeptner said his company’s acquisition of an 8.9 per cent stake in Spartan Resources in June provided a "seat at the table" and would continue to assess the gold miner as a potential target.

On the sidelines of the Diggers and Dealers conference in Kalgoorlie, Mr Zeptner said Ramelius moved on Spartan when "an opportunity presented itself" and the company would continue to assess the target.

"We did some work … and thought that is an opportunity we would like to capitalise on."

He said he knew Spartan’s managing director Simon Lawson, and the pair had had a coffee, "and that’s as far as it has gone," he said.

"Ultimately, as the project grows, it becomes more and more attractive to others, but it is in our backyard."