ASX soars to post biggest gain in three months

Welcome to your five-minute recap of the trading day and how the experts are seeing it.

The numbers: The Australian sharemarket posted its strongest gains in three months on Thursday, buoyed by a healthy session on Wall Street as US markets posted their most significant gains this month.

The ASX200 gained 1.44 per cent, or 93 points, to close at 6,555. All 11 sectors finished the day in the green, with the energy sector leading the charge, up 2.78 per cent.

The S&P 500 has snapped a six-day rout.Credit: Bloomberg

The lifters: Woodside Energy added 3.06 per cent; Santos gained 2.33 per cent; and Whitehaven Coal rose 4.46 per cent.

In the mining sector, market heavyweight BHP rose 2.47 per cent; Fortescue Metals added1.94 per cent; and Rio Tinto lifted 1 per cent. Financial stocks rose 1 per cent, with all big four banks closing in positive territory.

Retailer Premier Investments, owner of a range of brands including Peter Alexander and Smiggle, was the day’s best performer, jumping 14.6 per cent to $23.69 after it posted better than expected annual results and unveiled a 25 cent dividend bump for shareholders.

The laggers: Financial software company Iress shed 17.3 per cent after announcing a downgrade in its earning guidance due to increased supplier costs. Meridian Energy dropped 4.93 per cent; Woolworths slipped 0.46 per cent.

Meanwhile, AGL stocks finished flat after the company announced it would close the Loy Yang power plant a decade ahead of schedule. The brown coal plant generates about 30 per cent of Victoria’s power each year.

The lowdown: It was a jubilant day for the local sharemarket as overnight gains across global sharemarkets bolstered buying sentiment. While a two-day rally on oil prices boosted the energy sector, futures of the commodity are fluctuating. West Texas Intermediate futures traded below $82 a barrel after rising 7 per cent over the previous two sessions, including the biggest daily gain since mid-July.

An early release of Australia’s Consumer Price Index for August showed a slight drop in annual growth, easing to 6.8 per cent, down from July’s 7 per cent growth. This drop was mainly due to a slight ease in fuel prices, which are expected to rise again following the end of Australia’s fuel excise. It also comes as investors prepare for another rate hike next Tuesday, when the Reserve Bank board meets.

In other news, household wealth slipped for the first time since the pandemic, with superannuation balances taking a hit from bearish markets locally and overseas. The average Australian is now worth $553,954, a fall from $574,807 in the March quarter, with overall household wealth falling by 3.3 per cent. But household wealth is still up 7.8 per cent from a year ago.

Meanwhile, Australian job vacancies dropped slightly in August to one unemployed person per job vacancy. Despite the ease, job vacancies were still 107.4 per cent higher than they were in February 2020. The numbers indicate continued labour shortages and ongoing disruptions to operations.

US stocks and Treasuries rallied on Wednesday on the back of the Bank of England’s decision to stage a market intervention. The move boosted UK bonds and tentatively calmed markets.

On Wall Street, the S&P 500 snapped a six-day rout. It rose the most since early last month, and for the first time since the US Federal Reserve boosted rates and dialled up its hawkishness a week ago. The index jumped more than 2 per cent later in the session, bolstered by gains in Amazon.com shares after the company’s annual device event on Wednesday showed it pushing further into wellness, security and the auto industry.

The 10-year US Treasury yield dropped towards 3.72 per cent after topping 4 per cent earlier. The yield on 30-year UK gilts plunged more than one percentage point. Oil advanced with metals. Orange juice futures spiked as Hurricane Ian barrelled ashore in Southwest Florida.

Tweet of the day:

Quote of the day: “It’s shameful for Santos and SK E&S to think they can buy their way out of having to deal with causing millions and millions of tonnes of the very pollution that has already led to worsening fires, and floods around Australia,” said Dongjae Oh, a researcher with South Korean group Solutions for Our Climate.

The quotes come as energy giant Santos faces losing $500 million worth of funding for its controversial Barossa gas project, unless carbon reduction action is taken.

You may have missed: Australia’s betting industry is suffering despite the country’s prolific interest in punting. Over the course of the past year, shares in Points Bet, which has a significant presence in Australia but is also trying to become a major player in the US, are down 70 per cent.

With Bloomberg

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