Australian shares gain as miners rise, banks fall
At midday on Tuesday, the benchmark S&P/ASX200 index was up 15.5 points, or 0.18 per cent, to 8,683.7, while the broader All Ordinaries had gained 20 points, or 0.22 per cent, to 8,946.2.
Traders were digesting minutes from the Reserve Bank's July 7-8 meeting, in which the central bank surprised observers by leaving interest rates on hold rather than trimming them.
The minutes said most board members felt cutting rates for a third time in the space of four meetings "would be unlikely to be consistent with the strategy of easing monetary policy in a cautious and gradual manner to achieve the Board's inflation and full employment objectives".
Market participants were also pondering the reason for Monday's 1.0 per cent pullback, which followed a 1.37 per cent rally on Friday that had left the index at its highest level ever.
Monday's heavy selloff following Friday's all-time high mirrored a pattern that had occurred around half a dozen times last year, IG analyst Tony Sycamore said.
"While I find this pattern intriguing, I am still struggling to explain the rationale behind it," he wrote.
In the absence of a better theory, it is possible Monday's pullback was profit-taking ahead of the August earnings season that is likely to highlight stretched valuations in certain sectors, particularly the banks, Mr Sycamore said.
The ASX's financial sector was the worst performing at midday, down 1.2 per cent, while the materials/mining sector was the best performing, up 1.9 per cent.
All four of the big retail banks were in the red with CBA down 2.0 per cent, NAB falling 1.6 per cent and Westpac and ANZ both dipping 1.1 per cent, while all of the major miners were in the green.
BHP had grown 2.4 per cent, Fortescue had advanced 2.5 per cent and Rio Tinto had added 2.7 per cent.
Goldminers were also doing well as the yellow metal traded for a one-month high of just over $US3,400 an ounce.
Newmont had advanced 2.7 per cent, Evolution had risen 2.2 per cent and Emerald Resources had added 4.9 per cent.
Back in the financial sector, Insignia had soared 11.5 per cent to $4.38 after the company formerly known as IOOF agreed to be acquired by a US-based private equity firm for $3.2 billion.
CC Capital will pay $4.80 a share, a 56.9 per cent premium from Insignia's share price in December when news of its interest first became public, but less than the $5 per share price that CC lobbed in March.
The Australian dollar meanwhile was buying 65.22 US cents, from 65.17 US cents around 5pm on Monday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Perth Now
an hour ago
- Perth Now
Depth of US-Australia ties on show in tariff reprieve
Donald Trump's decision to spare Australia from increased tariffs shows the strength of the bilateral relationship, an expert says, and could give the nation an edge in global trade. While the US president has raised tariffs against dozens of nations, he showed mercy on Australia and kept levies against most products at 10 per cent. This means Australia has secured the lowest tariff rate of any US trading partner, defying speculation it would be hit with a higher levy because Prime Minister Anthony Albanese had not yet met face-to-face with Mr Trump. United States Studies Centre research director Jared Mondschein said the result was not surprising given Australia imports more from the US than vice versa and it has a free trade agreement with America. He said the decision highlighted the strength of the US-Australia relationship. "A lot of people put emphasis on the political leaders meeting, but the alliance is far deeper, wider and more expansive," he told AAP. "It's worth getting a meeting, but I just don't think it's an existential threat to the alliance to be unable to secure one. "Securing a 10 per cent tariff rate is definitely a win for Australia." The development has been celebrated by Trade Minister Don Farrell as a vindication of Australia's "cool and calm" diplomatic approach. Senator Farrell has predicted it could give Australia an advantage over other trading partners whose goods have been slugged with higher tariffs. "Australian products are now more competitive in the American market," he told reporters. For example, Australia and Brazil are two of the biggest beef exporters to the US. The tariff rate on the South American nation's goods has been hiked from 10 to 50 per cent, meaning its beef will become more expensive for American consumers, which could push them towards Australian products. Senator Farrell revealed American forces had pushed Mr Trump to increase tariffs on Australian goods, but the president resisted the calls. Mr Mondschein warned Australia not to get too comfortable. "The only certainty in the Trump administration is continued uncertainty when it comes to trade," he said. "In this administration, probably more than any other administration in modern history, there are a lot of folks who are pretty protectionist." The federal government has said it would continue calling for a complete tariff exemption, but no trading partner has been able to achieve this. Opposition trade spokesman Kevin Hogan said the tariff decision was driven by the US having a trade surplus with Australia, "not because of any effort from the prime minister".
Perth Now
3 hours ago
- Perth Now
Wall St selloff sparked by Trump tariffs
Wall St plunged after President Donald Trump announced a slew of steep new tariffs. (EPA PHOTO) Wall St plunged after President Donald Trump announced a slew of steep new tariffs. (EPA PHOTO) Credit: AAP Wall Street's main indexes declined sharply as new US tariffs on dozens of trading partners and Amazon's unimpressive earnings weighed on sentiment, while a weaker payrolls report added to risk aversion. Hours ahead of the tariff deadline, President Donald Trump signed an executive order on Friday imposing duties on US imports from countries including Canada, Brazil, India and Taiwan. Data showed US job growth slowed more than expected in July while the prior month's data was revised sharply lower, pointing to a sharp moderation in the labour market. "This was a pretty disappointing report ... markets are getting a little bit more worried about the state of the labour market in the aftermath of today's report," said BeiChen Lin, senior investment strategist at Russell Investments. Following the data, traders have raised their bets for a September interest rate cut to 81.9 per cent, according to CME's FedWatch tool. In early trading on Friday, the Dow Jones Industrial Average fell 633.77 points, or 1.44 per cent, to 43,491.55, the S&P 500 lost 107.59 points, or 1.70 per cent, to 6,231.80 and the Nasdaq Composite lost 483.70 points, or 2.29 per cent, to 20,638.74. The S&P 500 and the Nasdaq fell to a more than two-month low each, while the Dow slipped to an over one-month low. The CBOE Volatility index, also known as Wall Street's fear gauge, jumped to a near six-week high and was last up 20.66 points. Eight of the 11 S&P 500 sector indexes declined, led by consumer discretionary, which was down 3.4 per cent as Amazon slid 6.7 per cent. The company's growth in its cloud computing unit failed to impress investors, in contrast to robust gains reported by AI-focused rivals Alphabet and Microsoft. Technology and communication services indexes fell 1.9 per cent and 1.5 per cent, respectively. Apple posted its current-quarter revenue forecast well above Wall Street estimates, but CEO Tim Cook warned US tariffs would add $US1.1 billion ($A1.7 billion) in costs over the period. The stock edged 0.2 per cent lower. Most major megacap stocks fell, with Nvidia down 3.1 per cent, Tesla falling 2.6 per cent, Meta Platforms down 2.5 per cent, and Alphabet losing 1.4 per cent. Financials fell 2.2 per cent, with Coinbase Global falling 16.2 per cent after the crypto exchange reported a drop in adjusted profit for the second quarter. Industrial tools supplier WW Grainger dropped 9.2 per cent after slashing its forecast for annual profit. Trump said on Friday the Federal Reserve's board should assume control if the central bank's chair, Jerome Powell, continues to refuse to lower interest rates. Powell, despite pressure from Trump to cut rates, has indicated the central bank was in no rush to do so. The day's sharp losses put the S&P 500 and the Nasdaq on track for weekly losses, offsetting the week's earlier gains on signs of economic resilience, AI boost, and key US trade agreements with top partners such as the European Union and South Korea. Declining issues outnumbered advancers by a 2.93-to-1 ratio on the NYSE, and by a 4.43-to-1 ratio on the Nasdaq. The S&P 500 posted six new 52-week highs and 18 new lows, while the Nasdaq Composite recorded 8 new highs and 131 new lows.
ABC News
3 hours ago
- ABC News
Cracks emerge in US jobs market as Trump advances punishing tariff agenda
The US job market is showing weakness as companies grappled with US President Donald Trump's sweeping tariffs, government data showed on Friday. US job growth missed expectations in July, the data showed, and revisions to hiring figures in recent months brought them to the weakest levels since the Covid-19 pandemic. The employment data points to cracks in the key jobs market as companies took a cautious approach in hiring and investment and puts pressure on the central bank as it mulls the best time to cut interest rates. The Labor Department reported that US employers added just 73,000 jobs last month, well short of the 115,000 forecasters had expected. The jobless rate nudged up from 4.1 per cent to 4.2 per cent. Experts have warned that private sector firms appear to be in a wait-and-see mode due to heightened uncertainty over Mr Trump's rapidly-changing trade policy. With tariff levels climbing since the start of the year, both on imports from various countries and on sector-specific products such as steel, aluminium and autos, many firms have faced higher business costs. Some are now passing them along partially to consumers. On Friday, the Department of Labor said hiring numbers for May were revised down from 144,000 to 19,000. The figure for June was shifted from 147,000 to 14,000. This was notably lower than job creation levels in recent years. During the pandemic, the economy lost jobs. Average hourly learnings rose by 0.3 per cent to $36.44 in July, the Labor Department said. It added that employment continued rising in health care and in social assistance, while the federal government continued shedding jobs. "This is a game-changer jobs report. The labour market is deteriorating quickly," said Heather Long, chief economist at the Navy Federal Credit Union. She added in a note that of the growth in July, "75 per cent of those jobs were in one sector: healthcare." The US economy has added an average of just 35,000 jobs per month since May, data showed. "The economy needs certainty soon on tariffs," said Ms Long. "The longer this tariff whiplash lasts, the more likely this weak hiring environment turns into lay-offs." But it remains unclear when the dust will settle, with Mr Trump ordering the reimposition of steeper tariffs on scores of economies late Thursday that are set to take effect in a week. Mr Trump also raised tariffs on Canadian imports, while maintaining existing exemptions. Joel Kan, chief economist at the Mortgage Bankers Association, said that for now, "goods-producing industries saw contraction for the third straight month." "Service industries involved in trade also saw declines in job growth, potentially a result of the uncertain tariff environment, as businesses either put their activity on pause or pulled back altogether," Mr Kan added in a note. A sharp weakening in the labour market could push the Federal Reserve toward slashing interest rates sooner to shore up the economy. On Friday, the two Fed officials who voted this week against the central bank's decision to keep rates unchanged warned that standing pat risks further damaging the economy. Both Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller argued that the inflationary effects of tariffs were temporary. They added in separate statements that the bank should focus on fortifying the economy to avert further weakening in the labour market. Putting off an interest rate cut "could result in a deterioration in the labour market and a further slowing in economic growth," Ms Bowman added. "I believe that the wait and see approach is overly cautious," said Mr Waller. AFP/AP
