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ASX hits another intraday record as Origin, Westpac soar; Telstra slumps
By Staff reporter
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket closed in the green on Thursday, setting a new intraday record high as utilities and banking stocks buoyed the bourse. While Westpac soared, Commonwealth Bank endured another poor session.
The S&P/ASX 200 rose to 8899.1 before closing the session 46.7 points, or 0.5 per cent, higher to 8873.8 points, with eight of 11 industry sectors finishing in the green.
Wall Street advanced across the board overnight, setting the scene for gains on the ASX.Credit: AP
The lifters
The utilities sector led gains with a 3.5 per cent lift. This was driven by Origin Energy which finished 6.3 per cent higher after reporting strong gains from its LNG business in its full-year results, and predicting stronger-than-expected earnings growth for the year ahead from its industry-leading domestic power generation and energy retailing business.
AGL closed 2.1 per cent higher and Meridian Energy rose 0.8 per cent.
Westpac shares gained 6.3 per cent after the bank reported $1.9 billion in quarterly profits, helped by improved margins and fewer customers falling behind on loan repayments.
The country’s second-largest bank on Thursday said its unaudited profits for the June quarter were 14 per cent higher than the quarterly average during the first six months of the bank’s financial year. Among the rest of the big four banks, NAB rose 1.9 per cent and ANZ added 2 per cent.
Online furniture retailer Temple & Webster gained 8.8 per cent after another year of double-digit growth in revenue and earnings. Net profit grew five-fold to $11.3 million. The result was driven by strong demand for bedroom furniture and home improvement goods.
“The products in this category tend to be higher margin [and] very expensive,” said CEO Mark Coutler. “What we’ve done by having an online learning proposition [is] we’re cutting out all those store costs and able to pass on those savings to customers.”
The laggards
CBA was the outlier among its peers, declining 1.1 per cent after losing 5.4 per cent on Wednesday following its full-year results. Suncorp jumped 3.6 per cent as it reported a 52 per cent rise in net profit to $1.8 billion.
Telstra slid 2.6 per cent after it reported an annual net profit of $2.34 billion – up 31 per cent year-on-year – and said it had cut operating expenses by 6 per cent.
Mining giants declined. Fortescue fell 1.7 per cent, BHP dipped 0.5 per cent while Rio Tinto fell 3.7 per cent.
The Australian dollar dipped slightly throughout the day to US65.42¢ just before 5pm AEST.
The lowdown
The intraday high of 8899.1 marks the fourth straight record high this week. “The ASX200 raced out of the gates this morning,” said IG market analyst Tony Sycamore.
“This fresh record high followed gains on Wall Street overnight, as momentum toward more aggressive Fed rate cuts gained strength.”
Fresh ABS employment data released on Thursday showed 25,000 more people found work in July and unemployment fell to 4.2 per cent.
“Today’s jobs figures were very much in line with the market’s expectations, with employment growth and the unemployment rate both in line with the Bloomberg survey median – a rare event indeed,” said HSBC Paul Bloxham in a note. “As a result, the market reaction was muted.”
The figures provide reassurance that last month’s sharp rise in unemployment “was most likely a statistical blip,” he added.
“The jobs figures suggest the labour market is close to fully employed. Keep in mind the RBA estimates the natural rate of unemployment to be around 4.5 per cent, albeit with large standard error bands, and the Treasury puts it around 4.25 per cent. By either assessment the economy is close to fully employed.”
But the RBA needs to see wages growth slow further or productivity to pick up if it’s to consider cutting the cash rate again, Bloxham said.
July’s labour force data points to rates being held steady in September, said Sycamore, who is expecting the central bank to cut rates again in November and once again in February.
On Wednesday in the US, the S&P 500 rose 0.3 per cent, coming off its latest all-time high. The Dow Jones climbed 463 points, or 1 per cent, while the Nasdaq composite added 0.1 per cent to its own record set the day before.
Treasury yields eased in the bond market as expectations reached a virtual consensus that the Federal Reserve will cut its main interest rate for the first time this year in September. Lower rates can boost investment prices and the economy by making it cheaper for US households and businesses to borrow to buy houses, cars or equipment, though they risk worsening inflation.
On Wall Street, stocks of companies that could benefit most from lower interest rates helped lead the way. The hopes for lower interest rates are helping to drown out criticism that the US stock market has broadly grown too expensive after its big leap since hitting a low in April.
Bullish soared in its debut on the New York Stock Exchange and rose 83.8 per cent in its first day of trading. The cryptocurrency exchange’s CEO is Tom Farley, who used to be president of the NYSE Group.
On the losing end of Wall Street were grocery stores and delivery companies, which fell after Amazon said it will offer fresh groceries to customers in more than 1000 cities and towns through same-day delivery. Kroger fell 4.4 per cent and DoorDash dropped 3.8 per cent, while Amazon rose 1.4 per cent.
In the bond market, Treasury yields eased as expectations built for coming cuts to interest rates by the Fed.
The yield on the 10-year Treasury fell to 4.23 per cent from 4.29 per cent late Tuesday and from 4.5 per cent in mid-July. That’s a notable move for the bond market.
President Donald Trump has angrily been calling for cuts to help the economy, often insulting the Fed’s chair personally while doing so.
But the Fed has been hesitant so far because of the possibility that Trump’s tariffs could make inflation much worse. Lowering rates would give inflation more fuel, potentially adding oxygen to a growing fire. That’s why Fed officials have said they wanted to see more data come in about inflation before moving.
On Thursday, a report will show how bad inflation was at the wholesale level across the United States. Economists expect it to show inflation accelerated a touch to 2.4 per cent in July from 2.3 per cent in June.
Tweet of the day
Quote of the day
“Qantas, at one point, was just 11 weeks away from running out of cash. That’s not a buffer; that’s staring into the abyss. But we didn’t fall.”
That’s former Qantas boss Alan Joyce, who defended the airline’s cost-slashing strategy during the COVID crisis, while laying out the challenges for Australia’s aviation industry in a speech delivered on Thursday afternoon. Read the full story by aviation reporter Chris Zappone.
You may have missed
ABC managing director Hugh Marks wants the broadcaster to develop the next Bluey or its own version of MasterChef as part of his plan to fill the public broadcaster’s coffers and make it more relevant to more Australians.
Presenting his vision for the organisation on Wednesday, Marks said the ABC needed to make global hit shows while maintaining its local radio and news services.
“I mean, I always think of MasterChef. It came from a UK format, but the real derivation was in Australia, and it makes a billion dollars in revenue a year. If we had one of those successes, and we’re able to participate in that success, that will be a revolution in funding.”
Read the full story from media writer Calum Jaspan.
with AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.