- Updated
- Business
- Markets
- World markets
Tech stocks boost ASX as Wall Street notches up another win
By Millie Muroi
The Australian sharemarket jumped on Thursday with tech stocks, miners and real estate investment trusts leading the way following a positive lead from Wall Street.
The S&P/ASX 200 Index rose 69.6 points, or 0.9 per cent, to 7886.4 in afternoon trading, with all sectors in the green.
Tech giants have boosted the Wall Street once again.Credit: AP
The technology sector (up 1.3 per cent) was one of the stronger performers, with accounting software firm Xero (up 3.1 per cent) and data centre operator NEXTDC (up 1.6 per cent) both stepping up. Real estate investment trusts (up 1.3 per cent) were also in good shape, as Goodman Group gained 0.9 per cent and Mirvac climbed 3.8 per cent.
Telix Pharmaceuticals (up 11 per cent), gold miner Newmont (up 3.6 per cent) and Pilbara Minerals (up 3.2 per cent) were the biggest large-cap advancers. Miners (up 1.3 per cent) also gained momentum by midday.
However, coal miners were weaker with Yancoal (down 2 per cent) and Whitehaven (down 0.8 per cent) sliding after a recent rally.
Meridian Energy (down 3.5 per cent), Netwealth Group (down 2.7 per cent) and fertiliser and explosives manufacturer Incitec Pivot (down 1.4 per cent) were among the biggest large-cap decliners.
Overseas, Wall Street’s blistering rally stretched into a seventh day and vaulted the US stock market to more all-time highs.
The S&P 500 jumped 1 per cent and topped the 5600 level for the first time. The Nasdaq composite also rallied to a seventh straight gain and added 1.2 per cent to its all-time high set a day before. The Dow Jones, meanwhile, swung 1.1 per cent higher.
Big technology companies led the way, as has become the norm on Wall Street, and Taiwan Semiconductor’s US-listed shares rose 3.5 per cent after it said its revenue climbed nearly 33 per cent in June from a year earlier.
Taiwan Semiconductor, or TSMC, makes the chips for Nvidia and others that have been driving the business world’s rush into artificial-intelligence technology. The promise of big profits in the future from AI has sent Nvidia in particular to breathtaking heights over the last year, and Nvidia rose another 2.7 per cent Wednesday to bring its gain for the year so far to 172.5 per cent. It was again the strongest single force pushing the S&P 500 upward.
Fed chair Jerome Powell returned to Capitol Hill to give testimony about interest rates, where he echoed many of his comments from a day before. He said he was “not sending any signals” about when cuts to rates could arrive, but he pointed out the downsides of being too late on them.
“We’re looking at both sides” of the risks involved in moving its main interest rate, which has been sitting at its highest level in more than two decades, Powell said. Cutting rates too early could allow inflation to reaccelerate, while waiting too long could allow the economy’s slowdown to gather into a recession.
Much of Wall Street is expecting the Fed to begin cutting its main interest rate in September, but traders have a long history of being premature in their calls. Powell gave a nod to recent reports that have shown improvement in inflation following a discouraging start of the year, but he said again the Fed doesn’t have enough confidence that inflation is sustainably heading toward its goal of 2 per cent.
The yield on the 10-year Treasury edged down to 4.28 per cent from 4.3 per cent late on Tuesday and from 4.7 per cent since April. The move since the spring is a significant one for the bond market and offers support for stock prices.
The two-year Treasury yield, which moves more on expectations for Fed action, held steady at 4.62 per cent, where it was late Tuesday.
A report coming on Thursday could cause sharper swings in the bond and stock markets. That’s when the US government will release the latest monthly update on inflation. Economists expect it to show US consumers paid prices for food, airline tickets and everything else that were 3.1 per cent higher in June than a year earlier. That would be a touch slower than May’s 3.3 per cent inflation rate.
European indexes climbed.
With AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.