The Australian sharemarket experienced a significant uplift on Friday morning, driven by a surge in technology shares. This rally follows Wall Street’s record-breaking performance overnight, spurred by a major deal between tech giants Nvidia and Intel.
At 12:51 am, the S&P/ASX 200 had risen by 53.9 points, or 0.6 percent, reaching 8799.1. This increase was largely supported by gains in 10 out of 11 sectors, with technology and healthcare stocks leading the charge. The only sector not sharing in the uptrend was telecommunications.
Tech Stocks Lead the Charge
Technology shares mirrored the Nasdaq’s upward trajectory, with several notable performances. Family location app Life360 saw a 3.8 percent increase, while software giant Xero advanced by 1.6 percent. However, software logistics company WiseTech experienced a slight decline, dropping 0.3 percent in early afternoon trading.
Commonwealth Bank, the largest stock on the ASX, rose by 0.8 percent. The performance among the other major banks was mixed, with ANZ remaining flat, NAB increasing by 0.6 percent, and Westpac slipping by 0.5 percent.
Mining and Energy Sectors Show Resilience
In the mining sector, iron ore heavyweights like BHP and Fortescue Metals Group recovered from early losses, with BHP rising 0.6 percent and Fortescue up 0.8 percent. Rio Tinto remained flat. Gold miners also showed strength, with Northern Star Resources adding 1.2 percent, Newmont increasing by 0.7 percent, and Evolution Mining rising 1.7 percent.
Energy giant Santos rebounded with a 0.9 percent gain after an Abu Dhabi consortium withdrew its $30 billion bid for the company. Woodside Petroleum also saw a 0.8 percent increase.
Wall Street’s Influence and Broader Economic Context
Overnight, Wall Street set new records, with Nvidia and Intel leading a tech rally. The S&P 500 rose by 0.5 percent, marking its third consecutive winning week. The Dow Jones added 124 points, or 0.3 percent, while the Nasdaq composite climbed 0.9 percent. All three indices achieved all-time highs.
Intel soared 22.8 percent for its best day since 1987, following Nvidia’s announcement of a $US5 billion investment in Intel’s stock.
This collaboration aims to develop new products for data centers and personal computers. Nvidia’s stock climbed 3.5 percent, significantly contributing to the S&P 500’s rise.
Meanwhile, encouraging economic reports led to a rise in Treasury yields. Fewer US workers filed for unemployment benefits than expected, suggesting a potential slowdown in layoffs. This comes after the Federal Reserve cut its main interest rate for the first time this year to support the economy.
Global Market Reactions and Future Implications
Globally, European markets rose following mixed performances in Asia. London’s FTSE 100 added 0.2 percent after the Bank of England maintained its main interest rate.
In the bond market, the yield on the 10-year Treasury increased to 4.11 percent from 4.06 percent, reflecting expectations of continued interest rate cuts by the Federal Reserve.
As the ASX continues to benefit from Wall Street’s positive momentum, investors will be closely watching the Federal Reserve’s next moves. With high expectations for further rate cuts, any unexpected shifts could impact stock market stability.
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