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The Australian sharemarket posted its strongest gain in five weeks and hit a 5-month high following a softer than expected update on US inflation last night. The ASX 200 surged by 194pts or 2.79 per cent to 7158 with almost all sectors lifting significantly on Friday. While the Aussie market is still down by ~4 per cent this calendar year, the ASX 200 was down by as much as 14 per cent Year-to-Date in early October.
Overnight, the S&P500 – a broad measure of US market performance – rallied by 5.5 per cent after a closely watched monthly US inflation read slowed more than expected in October. This was a catalyst for the strongest improvements since 2020 for the Dow, S&P500 and tech heavy Nasdaq. This data fuelled the prospect of potentially smaller and fewer rate hikes by the Federal Reserve. The data pushed the US dollar and bond yields lower and helped commodities lift.
Money manager Pinnacle Investment (PNI) rose by 12.5 per cent, a day after Perpetual (PPT) received a sweetened takeover offer from a group of investors.
Nine Entertainment (NEC) jumped by 4.4 per cent after securing the exclusive rights for the Australian Open from 2025 to 2029. The media group will pay Tennis Australia $425m in cash over five years.
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Origin Energy (ORG) was a standout this week, lifting 32 per cent after receiving a revised $15.5bn takeover from a consortium of US and Canadian investors.
A softer US dollar and declining bond yields helped gold prices lift by close to 8 per cent this week. In turn, Evolution (EVN), Regis Resources (RRL) and St Barbara Mines (SBM) all rallied by close to 30 per cent in five days.
Coal miners New Hope (NHC) and Whitehaven (WHC) fell heavily this week, shedding roughly a fifth of their market value. WHC warned of higher costs and lower production due to flooding and bad weather. Coronado Global Resources (CRN) fell by ~15 per cent this week after takeover talks with Peabody – America’s largest coal miner – fell through.
James Hardie (JHX) fell close to 10 per cent this week after cutting its profit guidance due to a slowing US property market, while Domain (DHG) declined and flagged a ‘noticeable deterioration’ in the property market.
Tonight, US bond markets and banks will shut for a holiday, while equities will still trade normally. Next week, data on wages and jobs will receive attention in Australia mid-week.
Locally, 4.28bn shares were traded, worth a heavy $12.2bn. 1,005 stocks rose, 391 fell and 415 finished unchanged.
Published by Steven Daghlian – Market Analyst (Author) CommSec
