ASX hits record high on US-China talk hopes; Monash plummets on IVF bungle

The Australian sharemarket hit an all-time high on Tuesday, buoyed by hopes high-level talks between the US and China will ease global trade tensions as officials struck a positive tone after the first day of negotiations.

The S&P/ASX 200 rose 71.5 points, or 0.8 per cent, to 8587.20, beating its previous record from mid-February before the market’s tariff-induced crash in early April. All 11 industry sectors rose bar industrials, with banks, consumer and tech stocks leading the gains. CBA climbed to yet another record high, while Monash shares plummeted after news of another IVF bungle.

US Treasury Secretary Scott Bessent leaves trade talks with China at Lancaster House in London on Monday. Investors are betting on a good outcome of the meetings.Credit: Bloomberg

The bourse was closed on Monday for the King’s Birthday holiday. The Australian dollar strengthened overnight and was trading at US65.20¢ when the ASX finished on Tuesday.

American and Chinese officials met in London on Monday to discuss their trade dispute. US Treasury Secretary Scott Bessent cited a “good meeting”.

“We are doing well with China. China’s not easy,” President Donald Trump told reporters at the White House. “I’m only getting good reports.”

The advisers meet again on Tuesday at 10am in London (7pm AEST), according to a US official, as the two sides look to ease tensions over shipments of technology and rare earth elements.

Markets across Asia edged up as traders closely followed the talks between the economic superpowers. On the ASX, consumer discretionary, tech and financial stocks led the market higher as investors stepped up their bets for a de-escalation of the global trade war.

“There’s this growing optimism again that the negotiations will ultimately reach an agreement,” said Takeru Ogihara, an executive strategist at Asset Management One. “If the US and China can come together, it will be a positive development for the global economy.”

Meanwhile, local economic reports show Australian consumer confidence edged up in June as lower interest rates and cool inflation ran up against slow growth and trade upheavals to keep households cautious. Sentiment advanced 0.5 per cent to 92.6 points, the Westpac survey shows. The result still means pessimists outweigh optimists, with the dividing line at 100.

A separate survey by National Australia Bank shows business confidence advanced in May, while conditions – measuring sales, profitability and employment – slipped. The Reserve Bank of Australia watches conditions more closely as they reflect what firms are experiencing rather than what they think might happen.

The report “suggests the RBA should consider a larger 50 basis point cut [to interest rates] to prevent further economic decline,” said CreditorWatch’s chief economist Ivan Colhoun.

The big four banks all advanced. Commonwealth Bank extended its stellar run of recent months and rose 1.2 per cent to $182, another all-time high, valuing the nation’s biggest bank at almost $305 billion. NAB shares were up 1.5 per cent, Westpac gained 1 per cent and ANZ added 1.1 per cent.

Wesfarmers, the owner of the Bunnings, Officeworks and Kmart brands, rose 1.4 per cent, electronics retailer JB Hi-Fi added 2.1 per cent, and pokies maker Aristocrat gained 3.6 per cent. IGA owner Metcash climbed 3.5 per cent after flagging that its full-year profit after tax will beat analyst forecasts, and announced the merger of its hardware brands to strengthen its hardware business.

Tech stocks also advanced, with software makers WiseTech and Xero up 2.4 per cent and 1.8 per cent, respectively. Next DC jumped 5.2 per cent after the data centre operator announced an expansion in Malaysia and said its forward order book had reached a record amid rising demand for AI infrastructure.

Energy shares were higher as oil rose for a fourth straight day on optimism around the trade talks. Global benchmark Brent rose above $US67 a barrel, while West Texas Intermediate topped $US65. Oil and gas providers Woodside and Santos rose 0.7 per cent and 1.2 per cent respectively, while another fossil fuel giant, Yancoal, jumped 4 per cent.

Meanwhile, shares in Monash IVF slumped almost 27 per cent after the company admitted it transferred the wrong embryo into a Melbourne woman, the second such incident admitted to by the fertility giant in two months. Monash IVF said it had mistakenly transferred a patient’s embryo to her during a process in which she was supposed to receive an embryo from her partner. Its share price has halved over the past two months.

Hopes that Trump will lower his tariffs after reaching trade deals with countries around the world have been among the main reasons Wall Street has rallied so furiously since dropping roughly 20 per cent from its record two months ago. The S&P 500 is back above where it was when he shocked markets in April with his wide-ranging tariff announcement on what he called “Liberation Day”.

This may be the shortest sell-off following a shock of heightened volatility on record, according to strategists at Deutsche Bank. Typically, stocks take about two months to bottom following a spike in volatility and then another four to five months to recover their losses. This time around, stocks have basically made a round trip in less than two months.

But nothing is assured, of course, and that helped keep trading relatively quiet on Wall Street overnight. The S&P 500 edged up by 0.1 per cent to finish within 2.3 per cent of its record. The Dow Jones Industrial Average slipped by 1 point and the Nasdaq added 0.3 per cent.

On the losing side was Warner Bros Discovery, which lost 3 per cent after saying it would split into two companies. One will get Warner Bros. Television, HBO Max and other studio brands, while the other will keep CNN and other entertainment, sports and news TV brands, along with some digital products.

Tesla jumped about 4.5 per cent as Trump reiterated the desire to end his spat with Elon Musk. Apple slipped more than 1 per cent as it didn’t feature any noticeable artificial-intelligence advancements during a developers conference.

With AP, Bloomberg

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