Market wrap: ASX 200 moves above the 9000 point barrier on positive copper outlook

Market wrap: ASX 200 moves above the 9000 point barrier on positive copper outlook

The Australian share market broke through the 9000-point barrier again on Friday, with the ASX 200 managing to rise for the fourth month in a row.

The market initially started very strongly, sending the ASX 200 to a daily peak of 9059.80 points before weakening to close just below the 9000-point barrier at 8976.8 points – up 0.1% or 9.1 points for the day and up 2.3% for the month.

Much of the renewed optimism was driven by increasing confidence in artificial intelligence, highlighted by a sharp rally in South Korean technology stocks, which boosted copper mining stocks.

Microsoft jumps half a trillion in market value

US technology stocks rose strongly, led by Microsoft, which made market history by adding nearly half a trillion dollars to its value— the most by any stock in a single day.

Microsoft shares soared 16%, marking their biggest gain since October 2008, and added roughly US$450 billion (A$640 billion) to its market capitalisation.

Also helping investor confidence was the lower Australian inflation report for June that has helped to reinforce expectations that the Reserve Bank Board will keep the official cash rate steady at 4.35% at the next meeting on August 10 and August 11.

Investment inflows help Australia

There has also been a fresh inflow of investment cash at the start of the financial year, supporting share prices, while foreign investors have been attracted to Australia as a safe haven compared to more tech-heavy indices.

As the South Korean market rallied after the Wall Street jump, shares in major Australian miners with copper exposure also rose. BHP shares (ASX: BHP) increased by 2% to $60.31, and Rio Tinto shares (ASX: RIO) climbed 1.3% to $170.57.

While technology shares were mainly stronger offshore, the Australian tech sector was more mixed with shares in data centre operator NextDC (ASX: NXT) jumping 4.5% to $13.36 while transport software provider WiseTech Global shares (ASX: WST) reversed by a similar percentage, down 4.2% to $36.30.

Oil stocks rise despite oil fall

Former US President Trump’s new Gaza peace plan and fewer hostilities from Iran led to a 2% fall in the price of crude oil, but that didn’t trouble the share prices of most local oil and gas plays, with shares in Woodside Energy (ASX: WDS) rising 0.2% to $32.95, while Santos shares (ASX: STO) were up 0.1% to $7.84.

CSL drags down healthcare One of the weakest sectors on the market was healthcare with heavyweight leader CSL shares (ASX: CSL) weakening sharply by 3.8% to $123.06 on the back of more negative broker coverage. Fortescue shares (ASX: FMG) fell 1.9% to $18.51 as it expected to book a $US525 million ($746.8 million) after-tax impairment on its Iron Bridge magnetite project. Financial stocks were mostly weaker, with Commonwealth Bank shares (ASX: CBA) losing 0.4% to $177.53, while National Australia Bank (ASX: NAB) and ANZ Bank (ASX: ANZ) both lost 0.5% to $41.33 and $37.31, respectively.

HSBC getting out of retail banking

Global bank HSBC announced it is selling its $36 billion Australian home loan portfolio to private equity giant Blackstone and will wind down the rest of its local retail banking business over the next 18 months.

HSBC said it was quitting retail banking in Australia to focus on commercial and corporate banking clients, as part of a simplification push. Shares in Origin Energy (ASX: ORG) rose 0.9% to $10.76 after it said business electricity volumes rose 7% in the June quarter due to additional demand from data centre customers. Energy One shares (ASX: EOL) rocketed 31.8% to $14.30 after the company rejected a $565 million takeover approach from Norwegian rival Volue, which would have seen shareholders receive $17 per share.

The week ahead

Company earnings results in Australia and the US will be a major focus for the share market, influencing both the direction and magnitude of movements up or down.

Locally, some of the more interesting companies to report include fund manager Pinnacle, REA Group, sleep products company ResMed, Credit Corp, Charter Hall Social Infrastructure REIT, Argo Investments, Light & Wonder, Beach Energy, AMP, Block, Charter Hall Retail REIT, James Hardie, Avita Medical and Nick Scali.

Perhaps overshadowing all of that will be the US maiden result for SpaceX, as shares in Elon Musk’s futuristic space company trade below their float price after initially rising above it.

Other US stocks that will be closely watched include the AI software company Palantir after its shares wilted by around 30% this year as investors worried about slower growth.

Other major US results include drug maker Eli Lilly, Berkshire Hathaway, Marriott, AMD, Caterpillar, Merck, Amgen, Pfizer, McDonald’s, Archer-Daniels-Midland, Walt Disney, Shopify, Western Digital, Uber, CVS Health, DoorDash, eBay, News Corp, ConocoPhillips, Datadog, Airbnb, and Fiserv.