Banking stocks boost ASX 200 ahead of US inflation data; Worley drops

The heavyweight banking sector boosted the stockmarket, while the prospect of interest rate cuts also lifted consumer and technology stocks.

Investors are parsing local and overseas economic data this week. Picture: Gaye Gerard

The stockmarket closed higher as the prospect of interest rate cuts in 2024 boosted the heavyweight banking sector as well as consumer and tech stocks.

As global markets awaited key US inflation data, the S&P/ASX 200 Index closed 0.5 per cent stronger at 7506.00 points in quiet trading.

The broader All Ordinaries Index lifted 0.5 per cent to 7737.00 points.

IG market analyst Tony Sycamore said the big banks gained after Wednesday’s data showing a faster-than-expected fall in inflation, to 4.3 per cent in the year to November.

“A similar story for consumer-facing stocks that enjoyed the soft Australian inflation data and expectations of RBA rate cuts into the back half of 2024,” he said.

The big banks boosted the market as Commonwealth Bank hit a record high of $113.66, before closing with a 1.4 per cent gain to $113.60.

ANZ hit a two-year high of $26.09, ending 0.9 per cent stronger at $26.06.

Westpac rose 1.2 per cent to $23.24 and NAB was up 0.8 per cent to $30.97, while Macquarie advanced 1.5 per cent to $182.95.

JB Hi-Fi was a strong performer among consumer discretionary stocks, rising 3.8 per cent to $56.74.

Harvey Norman increased 1 per cent to $4.23 and Super Retail Group lifted 1.1 per cent to $15.35.

The interest rate-sensitive tech sector was the strongest performer, rising 1.2 per cent after gains by major tech shares on Wall Street overnight.

Among tech stocks, Altium rose 2.1 per cent to $46.06 after being raised to buy rating by CLSA, and NextDC rose by the same amount to $13.89.

Worley dropped as much as 5.8 per cent, before closing 2 per cent lower at $16.20 after the engineering group admitted to investors that an arbitration tribunal made corruption findings against it relating to contracts in Ecuador.

Mining and market heavyweight BHP eased 0.1 per cent to $47.81, Rio Tinto dropped 0.4 per cent to $128.40 and Fortescue lost 1.9 per cent to $27.04.

CZR Resources surged almost 43 per cent to 30c after the Mark Creasy-backed group cut a $102m deal to sell its Pilbara iron ore project to a Chinese investment company.

South32 lifted 5 per cent to $3.55 after Goldman Sachs upgraded its rating to buy, saying the mining group was a clear beneficiary of Alumina and Alcoa’s decision to shut down the Kwinana refinery by September.

Alumina fell 1.7 per cent to $1.13, giving up some of its recent gains, after being downgraded to neutral at Citi.

The energy sector finished flat after falling earlier in the day, on the back of an overnight decline in oil prices following an unexpected rise in US oil inventories.

Woodside ended up 0.9 per cent at $31.15 while Santos dropped 0.8 per cent to $7.44.

The price of bitcoin was higher near $US46,100 around the local market’s close, after US regulator SEC cleared the way for the first US exchange-traded funds that hold bitcoin to be sold to the public.

The key event for global markets this week is the release of the latest US inflation figures, at 12.30am Friday AEDT.

Mr Sycamore said annual headline inflation was expected to increase to 3.2 per cent from 3.1 per cent, but core inflation was tipped to ease to 3.8 per cent year-on-year, from 4.0 per cent.

“While the core measure is still above the Fed’s 2 per cent target, disinflation over the back half of 2023 has the six-month rate at around 2 per cent,” he said.

“A ‘good number’ is likely priced into the market, and an adverse reaction is highly likely if the CPI numbers are hotter than expected.”

The local gains followed Wall Street’s rise, where the S&P 500 added 0.6 per cent as it edged towards a record high, while gains by Meta and Microsoft boosted the Nasdaq Composite, which rose 0.8 per cent.

Originally published as Banking stocks boost ASX 200 ahead of US inflation data; Worley drops