Australian Sharemarket Surges 1.5% as Banks and Technology Stocks Rally

January 16, 2025 11:38 AM AEDT | By Team Kalkine Media

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Australian Sharemarket Surges 1.5% as Banks and Technology Stocks Rally — Image source: shutterstock

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Highlights

The S&P/ASX 200 Index gained 1.5% as US inflation cooled, driving optimism in equity markets.

Major Australian banks rallied over 2%, mirroring gains from US financial giants' strong results.

Technology and real estate sectors saw significant gains, with WiseTech and GMG posting strong recoveries.

The Australian sharemarket opened on a strong note, with the S&P/ASX 200 Index climbing 1.5% to reach 8329.4 points by 10:26 AEDT. The rally followed encouraging data from the US, where consumer prices showed signs of cooling in December. This development reduced concerns about further interest rate hikes and prompted a global surge in equities. All sectors opened higher, led by technology and financial stocks, as investor sentiment turned positive.

Wall Street set the tone overnight with a robust performance after core CPI data indicated a slower-than-expected rise, easing inflation fears. The news sent bond yields lower, with the US 10-year Treasury yield falling to 4.7%. Additionally, strong earnings reports from JPMorgan, Wells Fargo, Goldman Sachs, and Citigroup bolstered confidence. These banks reported their second-most profitable year, which supported a rally in global financial stocks.

Australian financial heavyweights followed suit, with the four major banks posting gains exceeding 2% each. Commonwealth Bank of Australia (ASX:CBA) rose 2.5%, while Macquarie Group (ASX:MQG) advanced 3.5%, reflecting the buoyant sentiment in the sector.

The technology and real estate sectors also witnessed notable gains, fueled by optimism surrounding the US inflation data. WiseTech Global (ASX:WTC) climbed 3.2%, recovering from prior losses, while Goodman Group (ASX:GMG) added 3.1%.

Bitcoin joined the risk-on rally, surging above $US100,000 briefly before settling at $US99,994.75. The cryptocurrency's strong performance further highlighted the shift towards risk assets amid cooling inflationary pressures.

Stocks in Focus

Tabcorp Holdings (ASX:TAH)
Tabcorp Holdings surged 4.6% following its announcement of Michael Fitzsimons' appointment as its first chief wagering officer. Fitzsimons, previously with the Hong Kong Jockey Club, was a high-profile recruitment revealed by Street Talk.

Ora Banda Mining (ASX:OBM)
Ora Banda Mining experienced a 4.3% decline for the December quarter but reaffirmed that a significant gold deposit remains on track to meet financial year production guidance.

MLG Oz (ASX:MLG)
MLG Oz shares jumped 6.1% after Northern Star Resources (ASX:NST) secured the company’s services for haulage and site operations. The contracts collectively represent an annual revenue potential exceeding $45 million for MLG.

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