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ASX rebounds as global recession fears ease
By Brittany Busch
Welcome to your five-minute recap of the trading day.
The numbers
Interest rate-sensitive stocks rallied on Australian sharemarket on Wednesday, helping the local bourse rebound from a two-day rout.
The S&P/ASX 200 closed 19.2 points, or 0.25 per cent, higher at 7699.80, with all but two of the 11 industry sectors advancing.
The reprieve came as global financial markets steadied amid hopes the US Federal Reserve will sharply cut interest rates to avert a recession in the world’s largest economy, and after the Bank of Japan indicated it wouldn’t raise its rates further in unstable markets.
Wall Street rebounded from its worst day in nearly two years.Credit: Bloomberg
The lifters
While the resources sector dipped 0.2 per cent overall, with market heavyweights BHP and Rio Tinto losing 0.6 per cent and 1.4 per cent, respectively, some mining stocks stood out.
Arcadium Lithium climbed 7.5 per cent after posting its second-quarter results in which it announced a review of its Western Australian operations. Large-cap miner Pilbara Minerals also jumped, up 6.43 per cent.
Sleep apnoea device maker Fisher and Paykel Healthcare (up 3.6 per cent) and investment manager GQG Partners (up 3.1 per cent) were also among the session’s biggest winners.
Interest-rate sensitive consumer stocks and real estate investment trusts advanced, with the likes of Wesfarmers (up 0.7 per cent) and JB Hi-Fi (up 0.6 per cent) rising alongside shopping centre owners Scentre (up 1.2 per cent), Stockland (up 1.1 per cent) and Vicinity (up 1.5 per cent).
The laggards
Struggling clothing retailer Mosaic Brands plunged 15.2 per cent after emerging from a trading halt shortly after midday to confirm reports it had engaged Deloitte to seek options on refinancing and restructuring, including safe harbour provisions to protect its directors from personal liability as they try to steer the business back on track.
The company behind fashion chains such as Noni B and Katies has seen its profits decline after being slow to pivot to e-commerce during the pandemic and facing a crunch in consumer spending.
Mercury NZ (down 3.5 per cent) and James Hardie Industries (down 2.3 per cent) were the biggest large-cap losers at the close.
Most of the banks ended also lower, with CBA, the biggest stock on the ASX, down 0.3 per cent.
The lowdown
eToro market analyst Josh Gilbert said anticipation of a rate cuts from the Federal Reserve, and the slightly dovish Bank of Japan keeping its interest rate unchanged buoyed the Australian stock market.
“The idea that the Federal Reserve is likely going to cut much sharper in terms of interest rates than the ones expected is probably good news for our rate-sensitive sectors here. It potentially pushes the RBA closer to a cut. That is helping drive those rate-sensitive sectors such as real estate, and that’s why that’s winning today.”
He said the continued steadying of the market on Wednesday indicated the recession fears out of the United States were overblown.
“We think that the bull market in the US isn’t finished just yet. Getting solid earnings growth from the US, from those earnings that we’ve seen so far, GDP is still positive in the US. We see this as just a typical pullback in markets, a bit of a slowdown after what has been a great start to the year.”
Gilbert said reporting season would largely determine the biggest winners and losers in the coming days.
Tweet of the day
Quote of the day
“Make no mistake: violent crime was up under Donald Trump – and that’s not even counting the crimes he committed!” said Tim Walz, Minnesota governor and running mate of Democratic presidential nominee Vice President Kamala Harris, during his first White House campaign rally.
“These guys are creepy and yes: just weird as hell ... So say it with me: We aren’t going back! We aren’t going back!”
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with AP
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