The Australian sharemarket experienced a notable rise on Friday morning, buoyed by a strong performance in technology shares. This upward movement follows Wall Street’s overnight rally, driven by a significant deal between tech giants Nvidia and Intel. As of 12:51 am, the S&P/ASX 200 climbed 53.9 points, or 0.6 percent, reaching 8799.1. Ten out of eleven sectors showed positive growth, with technology and healthcare stocks leading the charge. In contrast, telecommunication shares were the only sector in decline.
Technology stocks mirrored the Nasdaq’s positive trend, with Life360, a family member location app, increasing by 3.8 percent, and software giant Xero advancing by 1.6 percent. However, WiseTech, a software logistics company, saw a slight dip of 0.3 percent after early gains.
Commonwealth Bank of Australia (CBA), 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 up by 0.6 percent, and Westpac down by 0.5 percent.
Mining and Energy Sectors Show Resilience
In the mining sector, iron ore heavyweights BHP and Fortescue Metals Group saw increases of 0.6 percent and 0.8 percent, respectively, while Rio Tinto remained flat. Gold miners also posted gains, with Northern Star adding 1.2 percent, Newmont up by 0.7 percent, and Evolution Mining rising by 1.7 percent.
Energy giant Santos rebounded by 0.9 percent, recovering some losses from Thursday after an Abu Dhabi consortium withdrew its $30 billion bid. Woodside also rose by 0.8 percent, contributing to the sector’s overall recovery.
Wall Street’s Influence and Economic Indicators
Overnight, Wall Street achieved new records as Nvidia and Intel led a rally in technology stocks. Nvidia announced a $US5 billion investment in Intel, propelling Intel’s shares up by 22.8 percent, marking its best day since 1987. Nvidia itself climbed 3.5 percent, significantly boosting the S&P 500.
Encouraging economic reports in the U.S. led to rising Treasury yields, indicating a slowing pace of layoffs. The Federal Reserve’s recent interest rate cut, aimed at supporting the job market, has fueled expectations of further cuts, despite the complex economic situation of high inflation and a slowing job market.
“The Fed is in a precarious position, balancing a slowing job market with stubbornly high inflation,” said Fed Chair Jerome Powell.
Global Market Reactions and Sector Highlights
Globally, European markets rose, with London’s FTSE 100 adding 0.2 percent following the Bank of England’s decision to maintain its interest rate. In contrast, Asian markets showed mixed results.
In the bond market, the yield on the 10-year Treasury increased to 4.11 percent from 4.06 percent, reflecting market adjustments to the Fed’s interest rate strategies.
Meanwhile, the cryptocurrency sector saw significant gains, with Coinbase Global rising by 7 percent and Bitcoin surpassing $US117,500.
On a different note, Novo Nordisk’s U.S. stocks rose by 6.3 percent following positive study results for its weight-loss drug Wegovy and its diabetes treatment Ozempic.
Looking Ahead
The Australian dollar stood lower at US66.07¢ as of 12:55 pm AEST. As the market continues to respond to global economic signals and local developments, investors remain watchful of potential shifts in interest rates and their broader economic implications.
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