AUS
NZ
UK
CA
USA
IND
Highlights
- ASX Gains Supported by Commodities and Sector Strength: The S&P/ASX 200 (ASX:XJO) advanced 0.5% in the first trading session after Christmas, driven by gains in materials and energy sectors, along with strong performances from consumer discretionary stocks.
- Wall Street Shows Mixed Results: The US stock market experienced a quiet session, with healthcare and retail stocks offsetting losses from major tech companies, including Tesla and Meta.
- Economic Outlook and Market Trends: Despite a slower end to the year in European markets and subdued trading, US markets continue to show positive growth, with the S&P 500 up 26% for the year.
ASX Extends Rally Following Christmas Break with Gains Across Key Sectors
Australian shares extended their recovery on Friday, the first day of trading after the Christmas break, buoyed by rising commodity prices. The benchmark S&P/ASX 200 (ASX:XJO) index rose 39.1 points, or 0.5%, reaching 8260 at midday. The broader All Ordinaries (ASX:XAO) index mirrored this upward movement, gaining 0.5%.
Among the sectors, materials led the way, with significant contributions from key mining stocks. Rio Tinto (ASX:RIO) saw a 1.2% rise to $117.50, Fortescue Metals Group (ASX:FMG) gained 1% to $18.58, and BHP Group (ASX:BHP) climbed 0.4% to $39.905. Mineral Resources (ASX:MIN) also enjoyed a 1.5% increase to $34.51. These gains were fueled by the strong performance of commodity prices, which have been a key driver for Australian stocks in recent months.
The energy sector also posted notable gains. Woodside Energy (ASX:WDS) increased by 0.7% to $24.32, while Ampol (ASX:ALD) rose 0.4% to $6.56. Additionally, the consumer discretionary sector was the top performer, with Aristocrat Leisure (ASX:ALL) rising 1% to $69.46, Breville Group (ASX:BRG) jumping 2.3% to $36.34, and Wesfarmers (ASX:WES) adding 0.7% to $72.09. This strong performance across multiple sectors solidified the ASX's upward momentum, following a significant rally earlier in the week, which had seen the index surge by 1.7%, marking its best day in six months.
Despite a turbulent period of selling in the previous week, the Australian market is on track to deliver an 8.9% annual return, excluding dividends. The recovery reflects investor optimism in the face of global economic uncertainty, with commodities playing a pivotal role in the ASX's performance.
Meanwhile, US markets displayed a more mixed picture. On Wall Street, the S&P 500 (NYSE:SPX) ended flat, following a three-day winning streak. The Dow Jones Industrial Average (NYSE:DJIA) inched up by 28.7 points, or less than 0.1%, while the Nasdaq composite (NASDAQ:IXIC) fell slightly. The decline in tech-heavy stocks, including major players like Nvidia (NASDAQ:NVDA), Meta (NASDAQ:META), Amazon (NASDAQ:AMZN), and Netflix (NASDAQ:NFLX), contributed to the subdued performance. Tesla (NASDAQ:TSLA) was one of the biggest decliners, down 1.8%.
However, healthcare stocks provided a much-needed boost to the market. CVS Health (NYSE:CVS) rose 1.7%, and Walgreens Boots Alliance (NASDAQ:WBA) saw a 5.3% jump, the largest gain among S&P 500 stocks. Retailers also saw positive movements, with Target (NYSE:TGT) rising 3%, Best Buy (NYSE:BBY) gaining 2.9%, and Dollar Tree (NASDAQ:DLTR) climbing 3.8%. Investors were closely watching the retail sector as it gauges the strength of consumer spending during the holiday season, particularly after Christmas, one of the busiest shopping days of the year.
Treasury yields mostly turned lower during the session, with the yield on the 10-year Treasury bond (US10Y) falling to 4.58% from 4.59%. This follows a report showing steady US unemployment claims, though continuing claims rose to their highest level in three years. These developments come ahead of several key economic reports expected next week, including updates on home sales, construction spending, and manufacturing activity.
Despite the subdued end to the year in Europe, where major markets were closed, US markets continue to show resilience. Historically, the final trading days of the year have seen positive performance, with an average gain of 1.3% since 1950. As 2024 approaches, the S&P 500 (NYSE:SPX) has surged by approximately 26% year-to-date, near its all-time high, reflecting strong investor confidence.
Looking ahead, attention will remain on the US labor market, inflation trends, and potential economic shifts, particularly with the ongoing concerns about global trade, tariffs, and fiscal policies under the new US administration. Despite these challenges, the market remains on track to deliver strong returns for 2024, signaling continued optimism as the year draws to a close.
