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ASX steps up as Big Tech again drives Wall Street higher
By Millie Muroi
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket closed higher on Tuesday after three trading sessions of losses, with technology and healthcare stocks leading the way after solid gains on Wall Street overnight.
The S&P/ASX 200 Index rose 39.4 points, or 0.5 per cent, to 7971.1 at the close with all sectors except energy and miners moving higher. The Australian dollar was fetching US66.30¢.
Wall Street bounced higher to kick off its week. Credit: Michael Nagle
The lifters
WiseTech shares (up 2.2 per cent) helped lift the tech sector (up 1.6 per cent), while several firms buoyed the healthcare sector (up 1.5 per cent). Hearing implant maker Cochlear gained 2.5 per cent, Fisher & Paykel Healthcare advanced 2.7 per cent and Telix Pharmaceuticals rose 3.3 per cent.
Fisher & Paykel Healthcare stocks were one of the big movers in Tuesday’s trading.
Solid advances in the shares of Brambles (up 2.8 per cent) and Computershare (up 2.1 per cent) helped buoy the industrials sector (up 1.3 per cent).
All the big four banks were also stronger with Commonwealth Bank shares rising 1.1 per cent.
The laggards
On the losing end, energy (down 2 per cent) was the worst-performing sector. Woodside shares fell 3.7 per cent to be the biggest large-cap decliner. The oil giant said its revenue in the June quarter rose 2 per cent to $3 billion compared to the previous quarter, as its production slipped 1 per cent.
Mining shares were again among the worst large-cap performers, with Fortescue (down 1.6 per cent) and gold miners Northern Star (down 1.6 per cent) and Evolution Mining (down 1.5 per cent) all sliding.
The lowdown
IG Australia market analyst Tony Sycamore said local tech stocks benefited from the positive sentiment which flowed through the US tech sector overnight.
“The ASX200 today snapped a three-day losing streak, boosted by overnight gains on Wall Street following its worst week since April,” he said. “The tech sector led gains on Wall Street on reports that Nvidia is working on an export-compliant AI chip for China.”
Sycamore also said that despite US President Joe Biden withdrawing from the presidential election race over the weekend, the most likely outcome remained a Republican sweep under Donald Trump, who would be supportive of the US healthcare sector.
“Riding the ‘Trump Trade’ tailwinds, the ASX 200 healthcare sector gained 1.2 per cent to its highest level in 2½ years,” he said.
Overnight on Wall Street, US stocks closed higher, clawing back some of the losses from their worst week since April.
The S&P 500 Index rose 1.1 per cent, breaking a three-day losing streak. It was the first gain for the benchmark since it set a record high last Tuesday. The Dow Jones Industrial Average added 0.3 per cent and the Nasdaq Composite Index surged 1.6 per cent.
The gains were broad, with more than three-quarters of the stocks comprising the S&P 500 closing higher, although tech stocks accounted for much of the rally.
Nvidia shares rose 4.8 per cent and other Big Tech stocks also regained some of their sharp drops from last week to support the overall market. They had sputtered amid criticism they had grown too expensive.
The yield on the 10-year Treasury bond rose to 4.26 per cent, from 4.24 per cent late on Friday. Shorter-term yields were relatively steady. The two-year yield was unchanged at 4.52 per cent.
Other corners of the market that could have swung sharply on uncertainty about the election were mostly quiet. The US dollar’s value was relatively steady against its biggest rivals.
Reports on corporate profits and the US economy’s health could continue to grab the market’s attention. Analysts are expecting companies in the S&P 500 to deliver the strongest profit growth for the latest quarter since the end of 2021, according to FactSet.
Airlines last week struggled with massive disruptions from a global technology outage, which appeared to have been largely resolved over the weekend.
A faulty software update caused havoc worldwide and led to the grounding by almost all airlines of a number of flights. The vast majority of cancellations early on Monday were Delta Air Lines flights. Delta’s stock lost 3.5 per cent.
Cybersecurity firm CrowdStrike said the issue behind the outage was not a security incident or cyberattack and that it had deployed “a fix”. The company said the problem lay in a faulty update sent to computers running Microsoft Windows.
CrowdStrike’s stock fell another 13.5 per cent Monday after taking an 11.1 per cent hit on Friday.
Tweet of the day
Quote of the day
“To go out with something where you don’t need to put in your credit card details, you just get to try it no questions asked, is clearly unusual,” said Optus head of customer success Maurice McCarthy as the telco provider aims to win back customers by letting anyone try its mobile network for free for one week.
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With AP
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