The Australian share market soared to new heights as investors flocked back to the mining sector and weak retail data hinted at a possible interest rate cut by the Reserve Bank in the coming week. The benchmark S&P/ASX 200 Index rose by 0.7 percent, reaching 8597.7 points, surpassing its previous peak. This upswing was largely driven by gains in mining and real estate stocks, which dominated the market landscape.
Amidst uncertainty following US President Donald Trump’s announcement of impending higher tariffs on trading partners, the ASX managed to defy Wall Street’s negative trend and continued its climb upwards. Market analysts noted that July ushered in renewed optimism with a notable rotation trade strategy gaining traction among investors.
As Richard Coppleson from Bell Potter observed,
“We saw the rotation trade today, where investors buy the worst (or poor) performers from the second quarter or first half and sell those stocks that have had great rallies.”
The mining sector, which had been struggling over the past year, witnessed a significant uptick of 1.8 percent during this session.
Index heavyweights like BHP, Fortescue, and Rio Tinto experienced substantial gains fueled by an increase in commodity prices following positive Chinese manufacturing PMI data. Real estate stocks also surged ahead of expectations for an imminent rate cut by RBA after lackluster local retail sales figures were released.
Market sentiment strongly suggested a high probability of a rate cut next week as financial institutions like ANZ predicted a 25 basis points reduction on July 8. Consequently, property developers such as Goodman Group, Mirvac, Stockland, and Scentre Group enjoyed robust rallies alongside Dexus.
“The retail sales data cemented the idea of a rate cut next week,”
remarked IG market analyst Tony Sycamore.
“More stimulus is needed following subdued retail data revelations which gave the ASX a nice boost.”
On another front, technology stocks mirrored their US counterparts’ decline with Tesla witnessing a slump of 5.3 percent post-Trump’s remarks regarding subsidies withdrawal from Elon Musk’s companies. Locally, companies like Life360, Xero, and NextDC followed suit with minor dips in their stock value.
In terms of corporate developments making headlines during this trading session:
– Qantas shares dropped by 2.2 percent due to concerns over personal data security following news of a cyberattack affecting millions of customers.
– Helia faced a steep decline after revealing negotiation discussions with alternative providers amidst CBA discontinuing contract partnership.
– Domino’s Pizza witnessed significant downward movement upon CEO Mark van Dyck’s announcement of stepping down.
– James Hardie experienced an upward surge after finalizing its acquisition deal with US decking company Azek.
– Perpetual received positive momentum post UBS rating upgrade while Magellan saw growth backed by reiterated “buy
” recommendation from UBS.
– Corporate Travel Management observed slight decrease as Jefferies downgraded stock rating to “
hold”.
The day encapsulated various shifts within different sectors showcasing both challenges and opportunities for investors navigating through dynamic market conditions.
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