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FIVE at FIVE AU: ASX climbs on Info Tech and Mining gains; possible Trump Presidency shakes US markets

Published 03/07/2024, 04:09 pm
Updated 03/07/2024, 04:30 pm
© Reuters.  FIVE at FIVE AU: ASX climbs on Info Tech and Mining gains; possible Trump Presidency shakes US markets
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The ASX has climbed 0.17% or 13.2 points to 7,731.40, having lost 0.66% over the last five trading days.

The gains were mostly in Info Tech (+1.19%) and Materials (+1.03%) with an honourable mention for Real Estate (+0.90%).

Best-performing stocks were in Energy; uranium miners Deep Yellow gained 5.70% and Paladin Energy (ASX:PDN) 5.49%.

Utilities moved in the other direction, down 0.82% with additional weakness in Industrials, Financials and Comm Services.

The larger mining stocks were all in the green, with a 0.97% bump for BHP (ASX:BHP), 1.58% for Fortescue (ASX:FMG) and 1.26% for Rio Tinto (ASX:RIO).

The story was similar in Info Tech – WiseTech gained 1.92%, Xero 1.43% and NextDC 0.80%.

Commodities were mostly flat, but palladium gained 3.78% and platinum 1.89% even as nickel fell 2.36% and zinc 1.73%.

Overall, the ASX now sits 2.26% below its 52-week high.

ECB kills rate cut hopes; Trump spooks US markets

XTB research director Kathleen Brooks joins us to discuss the European Central Bank’s (ECB) recent comments and the looming likelihood of another Trump presidency’s effect on US markets.

“Christine Lagarde was a ‘buzz kill’ for the market on Tuesday,” Brooks writes.

“She opened the ECB’s central bankers conference by saying that she doesn’t have enough evidence to prove that inflation in the currency bloc has passed.

“Likewise, the ECB chief economist has also said that the June inflation report, which comes out later today, will not give the ECB enough information on the trajectory of service prices.

“Bond yields in the currency bloc are mostly stable on Tuesday but the market has reduced expectations for a September rate cut, which is now below 70%.

“It is worth noting that there are no BOE speakers at this conference due to the UK’s general election on Thursday. So far, the euro isn’t benefiting from this hawkish turn from the ECB.”

The other issue weighing on markets, according to Brooks, are concerns over what a Trump Presidency could mean for the US market and sustainability of the debt load.

“US veteran Pollster Nate Silver gave Trump more than 68% chance of winning the US Presidential election in November against President Biden,” Brooks writes.

“Silver has also predicted that Trump would win the popular vote. This spooked the markets and put upward pressure on US Treasuries at the start of the week.

“However, the US 10-year yield, which rose 10 basis points on Monday, is a touch lower at the start of trading on Tuesday, suggesting that the market is not convinced that the world’s biggest economy and reserve currency is likely to have a debt crisis any time soon.

“Stocks across Europe are a sea of red and the Cac 40 is also lower, partly erasing a recovery rally on Monday.

“Interestingly, bond yields are mostly flat to lower in Europe, which does not suggest that a broad-based sell-off is upon us, although there are still some acute political risks coming up.”

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