ASX springs higher, coal miners slump
By Millie Muroi
The Australian sharemarket climbed on Friday, as information technology companies stepped up and Wall Street reached its highest level in nearly eight weeks.
The S&P/ASX 200 was up 27.8 points, or 0.4 per cent, at 7,496.1 at the open, as all sectors except energy and health care traded in the green.
Information technology companies led the ascent, as WiseTech Global added 4.5 per cent and ResMed climbed on the back of a reported 10 per cent increase in revenue in the first half of 2023. Materials companies also gained, with heavyweight Fortescue Metals gaining 3.2 per cent on news that it had delivered record half-year shipments in the first half of FY23 as well as a 0.6 per cent lift in iron ore prices.
Coal prices were down 12.7 per cent, weighing down the energy sector and dragging down coal companies. New Hope Corporation (down 7.7 per cent), Whitehaven Coal (down 6.1 per cent) and Yancoal (down 5.4 per cent) led the decliners.
On Wall Street, stocks rose Thursday to their highest level in nearly eight weeks following reports suggesting the economy and corporate profits may be doing better than feared.
The S&P 500 climbed 1.1 per cent to clinch its highest finish since December 2. The Dow Jones Industrial Average gained 205 points, or 0.6 per cent, while the Nasdaq composite rallied 1.8 per cent.
More swings may still be ahead, as Wall Street digests a growing torrent of earnings and economic reports. Markets have veered up and down recently as worries about a severe recession and drop-off in profits battle against hopes the economy can manage a soft landing and the Federal Reserve may ease up on interest rates.
Thursday’s headline report showed the overall economy held up better through the last three months of 2022 than economists expected, even with the weight of all the rate hikes the Fed approved last year to combat inflation. According to the US government’s first of three estimates on it, the economy’s growth slowed to an annual rate of 2.9 per cent in the quarter, which was stronger than the 2.3 per cent that economists had forecast.
Other reports showed that orders for long-lasting goods from factories strengthened by more than expected in December and fewer workers applied for jobless claims than expected last week.
Strong data give hope the economy can withstand last year’s blizzard of rate hikes by the Fed, plus at least one more expected next week, without crashing to a deep recession. Higher rates intentionally slow the economy by making it more expensive to borrow to buy a home, a car or anything else on credit. They also drag down prices for stocks and other investments.
But a stronger-than-expected economy, particularly in the job market, can also carry risks. It could push the Fed to keep rates higher for longer in order to ensure inflation really is crushed. The Fed has already been saying repeatedly that it plans to do just that, at least through the end of the year, though many investors don’t seem to be buying it.
She cited the very low unemployment rate and relatively strong balance sheets at companies and households, among other things.
On the earnings front, reports from some big tech-oriented companies helped build optimism a day after worries flared following forecasts from Microsoft widely seen as discouraging.
Tesla jumped 11 per cent after the electric-vehicle maker reported stronger profit for its latest quarter than analysts expected. Seagate Technology rose 10.9 per cent after it reported stronger revenue and earnings than expected.
AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
Most Viewed in Business
Source: Thanks smh.com