ASX200 soars on possible US Federal Reserve rate cut, Chinese stimulus

The Aussie sharemarket lifted today on talks of a potential rate cut in the US, the start of a big tech week and potential stimulus measures from the world’s second largest economy.

A positive tone was set for the Australian sharemarket on Monday, with investors buying into stocks after the US Federal Reserve indicated another possible rate cut.

The benchmark ASX200 was up 64.4 points or 0.83 per cent, to settle at 7854.1, while the broader All Ordinaries index gained 68.80 points or 0.86 per cent to 8082.1.

The Aussie dollar gained 0.03 per cent to buy US63.25c at the closing bell.

The sell-off was broad based with eight of 11 sectors ending in the green, led by materials with a 1.58 per cent increase.

Chinese policymakers are expected to announce fresh stimulus measures, triggering a rise in the materials sector.

BHP rose 2.41 per cent to $39.58 and Rio Tinto climbed 1.79 per cent to $119.20 while Fortescue gained 4.18 per cent to $16.95.

Mineral Resources soared by 11.57 per cent to $24.49, making it the benchmark’s top performer.

Other mining stocks also rallied strongly, including IGO, which lifted 7.26 per cent to $4.28 and Pilbara Minerals, jumping 7.14 per cent to $1.95.

A potential US Federal Reserve rate cut has triggered investors to buy back into risky sectors such as energy.

Woodside Energy rallied 1.92 per cent to $22.81 and Ampol lifted by 2.55 per cent to $24.53 while Santos rose 0.8 per cent to $6.29.

The big four banks contributed to the market rise on Monday. Picture: NewsWire / James Gourley

There is also growing confidence in the powerful US tech sector with the annual GTC conference commencing on Monday.

Nvidia CEO Jensen Huang’s keynote address at the event is set to boost sentiment and potentially spark a rally in tech stocks.

Local tech darling WiseTech Global slipped 0.58 per cent to $84.49 and NEXTDC shed 2.51 per cent to $20.81, while Xero advanced 1.03 per cent to $159.00.

By 2035 the Aussie tech sector is expected to be a “$1.3 trillion freight train of stimulus,” Moomoo market analyst Jessica Amir said on Monday.

“Whatever happens in the US leads by example and then Australia plays catch up (and) our companies follow suit here.

“We didn’t see any new tariffs come out or anything new on Friday so that saw investors buy into the dip, that sent a positive tone on Wall Street on Friday.

“Some people are betting that we’ve seen the bottom of the market, but I don’t think we have.

“But for the most part it looks like things could be positive potentially this week until we see Trump announce more tariffs.”

The big four banks contributed to the market rise with Commonwealth Bank advancing 1.62 per cent to $144.66, ANZ lifting by 1.41 per cent to $28.69 and Westpac rising by 0.95 per cent to $29.89.

NAB edged lower by 0.18 per cent to finish the day at $33.24

The largest laggard was Clarity Pharmaceuticals down 3.42 per cent to $2.54.

Originally published as ASX200 soars on possible US Federal Reserve rate cut, Chinese stimulus