Australian shares continued their rally on Monday, breaking above the 8,000 mark for the first time in history amid speculation of an imminent interest rate cut in the United States.
Sky News Business Editor Ross Greenwood says The Star’s ambitions to secure a NSW casino licence appear to be “fading” by the day. “The latest news is that chairman David Foster has been replaced by director Anne Ward,” Greenwood said.
The benchmark ASX200 index jumped 58.3 points, or 0.73 per cent, to break the all-time high and close at 8,017.6 points.
The broader All Ordinaries index rose 56.3 points, or 0.69 percent, to close at 8,262.4 points.
Technology stocks rose 1.36 percent to 3,165.
The rally was broad-based, with all 11 industry sectors ending in the green, led by IT stocks up 1.39% and 1.37% respectively.
Retail giant Wesfarmers rose 2.1 percent to $70 a share while Harvey Norman rose 1.35 percent to $4.51.
Monday’s advance comes after Friday’s rally that saw the benchmark index close at a record high of 7,959.3 points, posting a weekly gain of 1.8 percent.
Expectations of an imminent interest rate cut by the US Federal Reserve are driving the rally, with investors now almost certain that a cut will come in September.
A cut in interest rates in the world’s largest economy would provide fresh support to stocks around the world.
The local market could also benefit from a rotation into large-cap U.S. technology stocks, said David Passanisi, chief economist at Bitshares.
“Because the Australian market is relatively cheap and unloved, it could become part of the ‘great rotation’ if global investors start looking for opportunities outside of large-cap US tech stocks like Nvidia,” he said.
The Australian share market hit another new record on trading day July 15, 2024. Photo: NewsWire/Jeremy Piper
The ASX’s rise comes despite some worrying data sweeping the Australian economy.
“Business and consumer confidence weakened in key reports last week, suggesting the economy is still slowly but steadily easing under the lagging impact of past RBA policy tightening,” Bassanisi warned.
“Consumer confidence has been hurt by increased talk of interest rate hikes, while households have yet to see the impact of the end-of-month tax cuts on their paychecks.
“We can only hope and pray that the CPI for the second quarter of next year, which will be released in two and a half weeks, will be benign.
“However, given the growing signs of easing inflation pressures in the US and a likely US interest rate cut soon, there is still a chance that the RBA will hold off on raising rates in August even if CPI rises slightly more than expected again.”
Major banks continued their upward march, led by new market giant Commonwealth Bank, which rose 0.78 percent to settle at a new record high of $132.69 per share.
Westpac shares rose 0.75 percent to $28.11, ANZ shares rose 0.78 percent to $29.83 and NAB shares added 0.81 percent to $37.25.
Major miners had a mixed session, with BHP and Fortescue shares up 0.62 per cent to $43.67 and 1.72 per cent to $22.48 respectively, while Rio Tinto and South32 were flat at $119.84 and $3.62 respectively.
Hard news continues to pour in for casino giant Star Entertainment. Photo: NewsWire/Glenn Campbell
In corporate news, casino giant Star Entertainment fell 1% to 50 cents after announcing it was shutting down its electronic gaming machines due to “system performance issues.”
“Star is working closely with its third-party provider Konami to address operational issues as soon as possible and will provide an update once operations return to normal,” the $1.45 billion company said.
“Treasury Museums Brisbane, The Star Gold Coast and The Star Sydney remain open with board games, restaurants, bars and entertainment available.”
Star did not provide a timetable for restarting the machines.
The biggest gainer on the ASX200 was healthcare company Nanosonics, which jumped 5 per cent to $3.31 after providing its H2FY24 trading update.
The company expects second-half revenue of $90.4 million, up 14% from the first half, and full-year revenue of $170 million.
Lifestyle Communities Inc. was the worst performer, falling 18% to $10.30 after a news report offered some critical views of the company’s operations.
The Australian dollar lost 0.07 percent to close at 67.7 US cents.
