AUS
NZ
UK
CA
USA
IND
Highlights
- ASX rises as banks drive gains amid strong Wall Street influence.
- MinRes faces major drop following founder controversy.
- RBA decision and US rate outlook keep markets focused.
The Australian stock market showed positive momentum at the start of the week, with banks leading gains following a favorable influence from Wall Street. The S&P/ASX 200 Index climbed 0.6 percent, adding 45.8 points to close at 8164.6, reversing a three-day losing streak. Last week, the index had dipped by 1.1 percent, marking its sharpest decline since August. The All Ordinaries Index also gained 0.5 percent, providing a strong start to a week set to feature significant economic updates and corporate earnings.
This week, major events are expected to impact market sentiment, beginning with the US presidential election and including key US corporate earnings reports. Central bank meetings are also on the horizon, starting with the Reserve Bank of Australia (RBA) on Tuesday. The RBA is anticipated to maintain its cash rate at 4.35 percent, a level held steady for the past year. However, markets indicate a one-in-four likelihood of a rate reduction within the year and foresee a potential shift by May 2025. Meanwhile, the US Federal Reserve is expected to adjust its rate by a quarter-point at the week's close.
Sector Movements and MinRes’ Decline
The ASX’s technology and utilities sectors recorded the strongest gains on Monday, while mining and energy stocks saw declines. Mineral Resources (ASX:MIN) emerged as the biggest laggard in the ASX 200, falling nearly 10 percent to $36.70. This drop followed the announcement that founder Chris Ellison would be stepping down over the next 18 months, following concerns over personal use of company resources. Mineral Resources has faced a challenging year, with the stock’s value down 47 percent year-to-date.
Additionally, across commodities, sectors from gold to lithium and uranium faced setbacks, driven in part by softening iron ore prices and anticipation around China’s economic strategies. The upcoming National People’s Congress Standing Committee meeting in China has sparked expectations of potential fiscal support to stabilize the economy. Mining giants Rio Tinto (ASX:RIO), BHP (ASX:BHP), and Fortescue Metals Group (ASX:FMG) each experienced declines, with shares slipping 1.3 percent, 0.4 percent, and 1.4 percent, respectively.
Energy Stocks and Corporate Earnings
Energy stocks were also impacted despite a 2 percent rise in oil prices as OPEC+ announced a delay in December’s production increases. Woodside Energy (ASX:WDS) saw a slight dip of 0.3 percent to $23.98, while Ampol (ASX:ALD) dropped 1 percent to $28.02.
In corporate news, Westpac (ASX:WBC) posted a net profit of $7 billion for FY2024, a modest decline from the previous year. The bank’s strategy to hold steady on mortgage discounts appeared to pay off, showing healthy volume growth at sustainable margins. Commonwealth Bank (ASX:CBA) and National Australia Bank (ASX:NAB) also saw gains, with Commonwealth Bank shares rising 1.6 percent to $144.35 and NAB advancing by 1.3 percent to $38.71.
Cancer diagnostics company Telix Pharmaceuticals (ASX:TLX) rallied 3.5 percent to $22.20, buoyed by news of a new Medicare Fee payment rule in the US, which improved its reimbursement prospects. This development has brought optimism to the company, particularly around its future growth in the healthcare sector.
