ASX gets tech boost after Wall Street records best day in two years

The Australian dollar rallied more than 1 per cent, trading close to US66¢, following remarks from Reserve Bank of Australia governor Michele Bullock on Thursday that raising the cash rate was still on the table, and that it would be done if necessary.

The big four banks all modestly rose. ANZ gained the most, up 1.1 per cent. In commodities, Brent crude continued its three-day rise, up 0.9 per cent to $US79.07 a barrel; and spot gold increased 1.8 per cent to $US2424.56/oz.

The laggards

On the flipside, large-cap QBE Insurance Group stocks dropped 1.7 per cent following its half-year report, which showed lower than expected net profit.

Energy companies Mercury NZ (down 2.1 per cent) and Meridian Energy (down 1 per cent) had the next biggest large-cap losses.

The lowdown

Novis Capital senior investment adviser Gary Glover said the better than expected US jobs data had given Wall Street a bounce, which contributed to the strong start on the ASX.

“The other fact was we literally dropped 500 points in three days as well. It was a fairly dramatic drop so we’re seeing a little bit of a counter move here. Probably a bit of correction,” he said.

Glover said Life360 stood out on Friday, and reporting season was likely to bring more big moves in the market in the coming weeks.

“We’ve got a big concentration, a lot of companies reporting in the next two weeks in terms of the big players in Australia, so there’ll be a lot going on,” he said.

“I think that brings more volatility than normal anyway, and then we’ve got the backdrop of what’s happened here in the markets as well in the last couple of weeks. There’s a bit more volatility, so probably going to remain quite volatile in the next couple of weeks with reporting season.”

In the US markets on Thursday, the S&P 500 jumped 2.3 per cent for its best day since 2022 and shaved off all but 0.5 per cent of its loss from what had been a brutal start to the week. The Dow Jones rose 683 points, or 1.8 per cent, and the Nasdaq composite climbed 2.9 per cent as Nvidia and other Big Tech stocks helped lead the way.

Treasury yields also climbed in the bond market, signalling that investors are feeling less worried about the economy after a report showed fewer US workers had applied for unemployment benefits last week. The number was better than economists had expected.

It was exactly a week ago that worse than expected data on unemployment claims helped inflame worries that the Federal Reserve had kept interest rates at too high of an economy-slowing level for too long in order to beat inflation. That helped send markets reeling worldwide. A rate hike by the Bank of Japan sent shockwaves worldwide by scrambling a favourite trade among some hedge funds.

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with AP

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