Weekly Wrap: Australian Share Market Rises 0.7% on Bullish U.S. Rate Cut Hopes
Bullish hopes for lower interest rates in the United States helped to push the Australian share market higher on Friday.
The ASX 200 rose 0.7% or 59.8 points to 8864.9 points following on from some record highs on Wall Street.
Ten of the 11 sectors ended higher with the biggest gains coming from the property sector, banks and the big miners, although energy stocks fell.
Property Keeps Booming
Overall the property sector rose 1.3% with the Goodman Group (ASX: GMC) up 2% to $34.37, Scentre (ASX: SCG) up 1.5% to $4.20 while Stockland (ASX: SGP) up 1.4% to $6.35.
A raft of job losses across the banking sector were reflected in higher share prices for the banks with sector leader Commonwealth (ASX: CBA) up 1.3% to $169.97 while the sector as a whole rose 1.2%.
NAB (ASX: NAB) was up 1.2% to $43.54, Westpac (ASX: WBC) was up 1.4% to $38.48 while ANZ (ASX: ANZ) was up 1.1% to $33.19.
The big miners also had a good day with the materials sector as a whole up more than 1% but once again it was the gold stocks that shone the brightest.
BHP (ASX: BHP) was up 1.3% to $40.81, Rio Tinto (ASX: RIO) was up 1.1% to $115.44 and Fortescue Metals (ASX: FMG) was up 0.86% to $18.80.
Gold Keeps Shining
Gold stocks were even firmer with Regis Resources (ASX: RRL) up a stunning 6.4% to $5.80 while shareholders in Bellevue Gold (ASX: BGL) did even better, up 7.2% 97¢ while Capricorn Metals (ASX: CMM) gained 3.8% to $12.32.
The reason for the gold flurry was not too hard to find, with uncertainty around US inflation pushing the gold price as high as US$3,639 an ounce.
Lower crude oil prices hit the energy sector with shares in Woodside Energy (ASX: WDS) down 3.4% to $24.22 and Santos (ASX: STO) fell 2.2% to $7.59.
Shares in APA Group (ASX: APA) firmed by 0.3% to $8.96 after a draft decision by the Australian Energy Regulator caused revenue forecasts for its Basslink undersea power connector to fall for the coming five years.
A $50 million final payout to former chief executive Jayne Hrdlicka did nothing to slow down Virgin Australia’s (ASX: VGN) performance, with shares up 0.3% to $3.22 as the company continued to leave its $2.90 listing price well behind.
The Week Ahead
We are in for a massive week of action by central banks, with the biggest highlight being the US Federal Reserve Open Market Committee which is widely expected to cut the Federal Funds Rate by 25 basis points to a range of 4% to 4.25%.
After an unprecedented bout of attempted meddling by President Donald Trump including the attempted sacking of Governor Lisa Cook and plenty of vitriol directed at chair Jerome Powell, it would be great to be a fly on the wall at this meeting.
Anyway, there has been enough smoke signalling from the Fed for investors to make a 25-basis point cut as close to a certainty as you can get.
Suffice to say, a hold would be taken very badly by the market and no doubt by President Trump as well.
Canada, England and Japan Also Have Live Rate Meetings
The Bank of Canada is also expected to cut rates by 25 basis points to 2.5% but meeting by the Bank of England and Bank of Japan are both expected to hold their rates steady.
A swag of Chinese data on everything from home prices, retail sales, investment and industrial production is once again expected to show a continuation of slowing activity.
Here in Australia another $2.4 billion in dividends will be paid out and if recent weeks are a guide, share prices will come under pressure as soon as companies start to trade ex-dividend.