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Australian shares up 0.2% amid global tech stock optimism

Published 25/01/2024, 09:47 am
© Reuters.
- - A global wave of enthusiasm for technology stocks, spurred by encouraging news from Netflix (NASDAQ:NFLX), ASML, and SAP, is setting Australian shares on a course for growth. Market heavyweights Microsoft (NASDAQ:MSFT) and Nvidia have both set new record highs, with Tesla (NASDAQ:TSLA) and Resmed due to report after the closing bell.

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Iron ore experienced a resurgence following the announcement by the governor of China's central bank about a potential reduction in the reserve requirement ratio for banks within two weeks. This is the latest indication that China is working to strengthen its struggling equities markets and overall economic outlook.

Netflix shares soared by 10.7% following a surprising increase in subscribers, solidifying its position as the leading global streaming service. In Europe, ASML and SAP experienced significant growth due to unexpected order strength, further enhancing the outlook for semiconductor manufacturers. US-based chipmakers, including AMD (NASDAQ:AMD), Nvidia, Broadcom (NASDAQ:AVGO), Qualcomm (NASDAQ:QCOM), and Intel (NASDAQ:INTC), also saw gains.

Nvidia is approaching Amazon (NASDAQ:AMZN)'s market cap, with its share price having risen 217% over the past year. Microsoft's stock market value also briefly surpassed the $US3 trillion mark for the first time, making it the world's second most valuable company, just behind Apple (NASDAQ:AAPL). Microsoft and Apple have been competing for the top spot as the most capitalized stock on Wall Street since the beginning of the year.

Google's parent company, Alphabet (NASDAQ:GOOGL), also rallied, momentarily putting it on track to close at an all-time high for the first time in over two years. CNN's Fear and Greed Index has entered 'extreme greed' territory, with a reading of 76 out of 100 at 4 pm in New York.

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ASX 200 Futures were up 18 points or 0.2% to 7506 as of 8 am AEDT. The Australian dollar fell slightly, while Bitcoin saw a 1.2% increase.

The latest data on purchasing for manufacturing and services contributed to the overall positive sentiment in markets overnight. The Bank of Canada maintained its key rate at 5% as expected, with several institutions forecasting the first cut for June.

Late on Wednesday, the People’s Bank of China announced plans to cut the reserve requirement ratio for banks within two weeks, providing 1 trillion yuan in long-term liquidity to the market.

In a note, Morgan Stanley (NYSE:MS) Research mentioned that the lowered consensus 4Q EPS estimate over the past three months creates a higher probability of a solid, mid-single-digit EPS surprise for 4Q earnings. The firm expects 4Q results to spur share-price upside for several companies, including Amazon, BellRing, CBOE, IDEXX Laboratories, NOV, SBA Communications (NASDAQ:SBAC), Tenable, and Western Digital (NASDAQ:WDC).

ASML Holding (AS:ASML), Europe's most valuable technology company, saw its shares rise 9.7% to close at a record high in Amsterdam after its orders more than tripled last quarter, indicating a resurgence in parts of the semiconductor industry. Germany's SAP also touched a record high after announcing a restructuring plan for 2024 and reporting robust growth in its cloud order backlog for the fourth quarter.

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