ASX set to rise, Google’s parent weighs on Wall Street; Nissan-Honda merger in jeopardy

The four big banks rallied, leading the broader market higher, with CBA notching a record-high at $162.64 (up 2.6 per cent), Westpac gaining 2.2 per cent, ANZ jumping 2.6 per cent and NAB up 2.5 per cent. Real estate investment trusts were also in the green, with shares in Goodman Group rising 1.5 per cent, while shopping centre owners Vicinity, Stockland and Scentre rose 0.9 per cent, 1.1 per cent and 1.2 per cent respectively.

Consumer discretionary stocks were also strong, with Bunnings, Kmart and Officeworks owner Wesfarmer, the sector’s biggest stock, jumping 3.1 per cent. Pokies maker Aristocrat, the second-biggest, was up 1.6 per cent, while retail giant Harvey Norman rose 1.7 per cent.

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Mining heavyweights had a mixed day. Fortescue added nearly 2 per cent, while bigger rivals Rio Tinto and BHP rose a more muted 0.8 per cent and 0.3 per cent.

Gold miners advanced after the price of bullion blew through a series of record highs overnight as rising economic and geopolitical risks supported haven demand. Northern Star Resources rose 2.8 per cent, Evolution Mining added 1.8 per cent and Newmont gained 2.1 per cent.

The laggards

Energy was the only sector in the red. Shares in Ampol and Santos fell 1.2 per cent and 0.6 per cent. Woodside Energy recovered from a slide in the morning and ended 0.2 per cent up. Oil prices stayed near their lowest this year as Trump’s geopolitical positions and threats of tariffs on energy weighed on the outlook.

West Texas Intermediate traded above $US71 a barrel after falling 2.3 per cent on Wednesday to cancel out all year-to-date gains, while Brent crude closed below $US75. China is set to impose retaliatory tariffs on the US from Monday, igniting a trade war that could hurt global growth, while Trump’s proposal to take over Gaza has been widely condemned by international leaders.

The lowdown

IG Markets analyst Tony Sycamore said the Australian sharemarket’s performance on Thursday had been bolstered by gains on Wall Street, solid corporate earnings, and after Chinese authorities set the yuan’s fixing rate at 7.1691 per US dollar, the strongest since November 8th.

“The stronger [US dollar/yuan] fix aligns with China’s restrained response to US tariffs this week and can be interpreted as an indication that China is prepared to accept a 10 per cent tariff rate to delay and avoid more severe tariffs of 40 to 60 per cent, which could damage its already fragile economy,” he wrote in a note to clients.

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“This is good news for the big iron miners, with all four on track to secure a third consecutive day of gains.”

Overnight in New York, Wall Street drifted higher as broad gains for most stocks outweighed drops for Alphabet and some other big-name companies following their latest profit reports.

The S&P 500 rose 0.4 per cent, while the Dow Jones added 0.7 per cent, and the Nasdaq gained 0.2 per cent.

Toymaker Mattel jumped 15.3 per cent after blowing past analysts’ forecasts for profit in the latest quarter. Strength for its Hot Wheels brand helped make up for some softness for Barbie and other dolls. Mattel also gave a forecast for profit this upcoming year that topped analysts’ expectations.

Amgen rallied 6.5 per cent and was one of the strongest forces pushing upwards on the S&P 500. It reported stronger profit for the latest quarter than expected, thanks in part to growth for its Repatha medicine, which can lower bad cholesterol and reduce the risk of heart attack.

The rises helped offset a 7.3 per cent drop for Alphabet, which sank even though Google’s parent company reported stronger profit for the latest quarter than analysts expected. Investors focused instead on slowing growth for its cloud business, whose revenue fell short of forecasts.

They also homed in on the $US75 billion ($119 billion) Alphabet is budgeting for investments this year, roughly $US15 billion more than analysts expected, as it remains in the rush to develop AI technology.

After rocking financial markets around the world at the start of this week, worries about a potentially punishing global trade war have eased slightly after Trump gave 30-day reprieves for tariffs on Mexico and Canada. That bolstered traders’ hopes that he sees tariffs as merely a tool for negotiation, rather than as a long-term policy.

Tweet of the day

Quote of the day

“ABC managing director David Anderson has just 23 days left as the boss of our embattled public broadcaster, and the Federal Court – dealing with the termination of radio presenter Antoinette Lattouf – is not where he wanted to spend it.”

Read more of Colin Kruger’s opinion piece here. 

You might have missed

Late on Tuesday, the US Postal Service announced that it was suspending delivery of packages from China and Hong Kong. Less than 24 hours later, as the shock reverberated through the global logistics sector, it reversed the decision.

The USPS about-face is typical of the chaos and confusion generated by Trump’s torrent of executive orders, which are seemingly issued without thought to how they might be implemented, writes Stephen Bartholomeusz in his column. 

With AP

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