ASX bounces back as miners rally; Star suspended

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket has started the week in positive territory, buoyed by every industry sector trading in the green, after US stocks rallied on Friday to close out a dreary February on a brighter note.

Wall Street closed an unhappy February with strong gains.Credit: Bloomberg

The S&P/ASX 200 lifted 73.3 points or 0.9 per cent higher to close at 8245.7 points. Mining and energy stocks were among the big winners, while banks treaded water. The Australian dollar was fetching US62.2¢, recovering slightly after losing more than 3 per cent last week. It could be a volatile week for currencies as the US prepares to impose new tariffs on Canada, Mexico and China.

The lifters

Mining stocks lifted the local bourse as Rio surged 3.6 per cent, Fortescue advanced 1.2 per cent and BHP added 1.4 per cent. Energy giant Woodside added 1.9 per cent while Santos was 1.8 per cent higher at close. Building services company Johns Lyng Group closed at the top of the index with gains of 7.8 per cent, while Boss Energy added 6.5 per cent.

Harvey Norman added 4.2 per cent. JPMorgan, which has an overweight rating on Harvey Norman, has increased its price target on the white goods retailer from $6.30 to $6.50 and said it is closing the gap on rival JB Hi-Fi, which saw its stock rise 2.4 per cent.

The laggards

Star Entertainment was suspended from trading by the ASX on Monday morning after failing to lodge financial statements for the December half year.

The casino operator’s board has not been able to sign off on the accounts, with the group still unable to secure financing to ensure it won’t run out of cash as early as this week.

Star is yet to update the market on offers of financing it expected to receive on Friday, and could go into administration if unable to secure extra funds.

On the other end of the bourse, Clarity Pharmaceuticals dived 11.5 per cent and construction and mining contractor NRW Holdings declined 9.3 per cent as investors fretted over whether it can recoup the $113.3 million owed to it by the collapsed Whyalla Steelworks.

The big four banks were mixed, with Westpac and ANZ treading water, down 0.03 per cent and 0.1 per cent respectively, while CBA and NAB rebounded from losses in early trade to close up 0.3 per cent and 0.1 per cent respectively.

The lowdown

US President Donald Trump’s announcement of additional 10 per cent tariffs on China, one of Australia’s biggest trading partners, stoked a wider sell-off of stocks in the US on Friday. However, a late rally saw the index shake off the tremors.

Despite the rally, analysts have warned that the current anxiety, heightened by the clash between Trump and Ukrainian President Volodymyr Zelensky, is just the tip of the iceberg as geopolitical uncertainty could further stifle business and consumer sentiment globally.

In a note to clients, Judo Bank said the weak Australian dollar, which fell back to US62¢ after reaching highs of US64¢ a week ago, was a “casualty of Trump pushing hard on tariffs and pulling back from financially supporting Ukraine.”

“There is concern that Australia will not be immune from tariffs, which will impact sectors such as steelmaking and agriculture,” Judo Bank said.

US consumers had already given big hints that they’re under pressure and worried. Inflation is still high, even if it’s not as bad as its peak from 2022, and a widespread worry is that tariffs announced by Trump could push prices for the cost of living even higher. Uncertainty surrounding the war in Ukraine was highlighted by Trump’s stunning clash with Zelensky in the Oval Office on Friday in Washington.

Wall Street hopes that all the talk about tariffs is merely a tool Trump uses to negotiate with other countries and that he’ll ultimately pull back on them, which would mean less pain for the global economy than initially feared.

All told, the S&P 500 rose 92.93 points to 5954.50. The Dow Jones Industrial Average gained 601.41 to 43,840.91, and the Nasdaq composite jumped 302.86 to 18,847.28.

Tweet of the day

Quote of the day

“In any event, Xi knows China is heading into a new trade war more trade-exposed than it was during the 2018-19 episode and with a US administration filled with China hawks who are committed to implementing Trump’s every desire, misconceived (he doesn’t seem to understand trade or tariffs) or not.”

That’s Stephen Bartholomeusz on the upcoming meeting China’s leaders will hold in Beijing this week, where the top of the agenda will be the threat posed by the US president. You can read his full column here.

You may have missed

Australia’s biggest oil and gas exporters forecast a significant lift in demand for liquefied gas over the next decade, even as debate continues about the role of the fossil fuel in the transition to cleaner energy.

Shell, which produces natural gas off the coast of Western Australia and in Queensland, bumped up its long-term demand predictions last week, saying it now expects the world’s consumption of liquefied natural gas (LNG) to increase 60 per cent by 2040 amid faster economic growth in Asia.

With AAP, AP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.