ASX200 snaps three-day losing streak in frothy rebound
The local sharemarket ripped higher on Thursday to snap a three-day losing streak with consumer stocks leading the frothy rebound.
The ASX200 lifted 77.3 points, or nearly 1 per cent, to close at 8203.7, while the broader All Ordinaries index jumped 90 points, or 1.08 per cent, to settle at 8462.8.
The All Technology index surged 1.97 per cent to 3433.
The rebound was broadbased, with 10 of 11 industry sectors ending in the green, led by discretionary with a 2 per cent gain.
Consumer businesses are rallying on Wednesday’s cool inflation print for the month of August, which some analysts have interpreted to open the door for a December rate cut from the RBA.
Annual headline inflation dropped from 3.5 per cent to 2.7 per cent, the ABS reported, and underlying inflation fell from 3.8 per cent to 3.4 per cent.
“I still think we’re basking in the afterglow of the inflation data yesterday,” IG markets analyst Tony Sycamore said.
“Consumer stocks have embraced that data.”
Nick Scali lifted 2.14 per cent to $16.22 a share, JB Hi-Fi jumped 3 per cent to $80.98 and retail conglomerate Wesfarmers climbed 1.5 per cent to $70.99.
Camera IconThe ASX200 rallied on Thursday. NewsWire / Gaye Gerard Credit: News Corp Australia
Additional potential stimulus measures out of China added support to the rally, with reports breaking in the morning of a possible 1 trillion yuan, or US$142bn, injection into the Middle Kingdom’s state banks.
“This funding, likely sourced from new special sovereign bonds, would complement the monetary policy easing announced earlier this week, including cuts to the reserve requirement ratio, policy rate and mortgage rate cuts for existing borrowers,” Mr Sycamore said.
“This comes as Chinese authorities respond to the downside risks to the government’s ‘around 5 per cent’ real GDP growth target.
“As noted after the PBOC’s easing measures announced on Tuesday, while rate cuts are a step in the right direction, fiscal stimulus is essential to boost household consumption and reignite flagging animal spirits.”
The prospect of a rebound in Chinese growth has triggered a rally in iron ore prices and the big miners lifted for a third consecutive session.
BHP jumped 1.55 per cent to $43.36, Rio Tinto climbed 1.96 per cent to $123.22 and Fortescue advanced 2.92 per cent to $19.40.
The telecommunications sector booked a 1.56 per cent gain, with TPG surging 5.59 per cent to $4.91 and Telstra gaining 1.02 per cent to $3.95.
The big banks were mixed, with Commonwealth Bank losing 0.4 per cent to $134.35, ANZ slipping 0.01 per cent to $30.75 and Westpac falling 0.65 per cent to $32.34, while NAB rose 0.35 per cent to $37.61.
Thursday’s rally has recovered most of the losses from the first three days of the week, and came despite a mixed session on Wall St overnight.
Camera IconTroubled gaming company Star Entertainment reported in 2024 financial year numbers of Thursday. NewsWire / Glenn Campbell Credit: News Corp Australia
The Dow Jones fell 293 points, or 0.7 per cent, to 41,914 points, while the S&P500 index slipped 0.19 per cent to 5722.
The tech-heavy Nasdaq edged up 0.04 per cent to 18,082.
In corporate news, embattled gaming company Star Entertainment reported a $1.7bn loss for the 2024 financial year and a 10 per cent drop in revenues to $1.7bn.
Star also announced a new $200m debt facility on Wednesday evening as it battles a complicated sweep of legal and cashflow challenges.
Shares in the company remain in a trading halt.
Step One Clothing tumbled 8.8 per cent to $1.71 after revealing its CEO and founder Greg Taylor had sold nearly 9 per cent of the company’s shares.
The top gainer on the ASX200 was building materials company Brickworks, which leapt 7.55 per cent to $28.61 despite reporting a full-year loss of $118.9m.
The largest laggard was oil and gas behemoth Woodside Energy, which retreated 2.95 per cent to $24.63.
The Aussie dollar gained 0.56 per cent to buy US68.6c at the closing bell.
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