Australian shares enjoyed a strong start to the week today, gaining 50.00 points or 0.64% to 7,864.40 at the close of the day's trade. The Star Entertainment Group Ltd and New Hope Corporation Ltd were up 18.33% and 7.26% respectively.
Over the last five days, the index has gained 1.49% and is currently 0.58% off its 52-week high.
Miners pull their weight
A surge in mining stocks propelled the buoyant mood on the ASX, underpinned by positivity about a new effort by Beijing to rescue a weak property sector.
The big mover of the day, troubled casino operator Star Entertainment, is being eyed off for a takeover by US-owned Hard Rock Hotels. This caused its shares to soar as much as 22% to 55 cents after starting the day in a trading halt.
Real Estate was the only sector in the red just after lunch, down 0.92%, while Materials and Energy were both buoyant, up 2.06% and 2.20% respectively.
The miners have been strong today, with Rio Tinto (ASX:RIO) up 2.8%, BHP (ASX:BHP) gaining 2.1% and Fortescue (ASX:FMG) adding 1.8% in the afternoon.
Energy stocks have risen too – with Santos gaining 1.5% and Woodside up 0.9% respectively, and uranium miner Paladin doing even better with an 8.3% shift.
What will the Fed do next?
Last week, the S&P500 and the Nasdaq hit new highs, while the Dow Jones closed above 40,000 for the first time, in a fifth straight week of gains.
We can thank cooler US inflation data for prompting the record-breaking run last week, improving the outlook for Fed rate cuts this year.
IG analyst Tony Sycamore pondered what we can expect from the FOMC meeting minutes on Thursday.
“At its meeting in May, US policymakers kept interest rates unchanged at 5.25%-5.50% as widely expected.
“Fed chair Jerome Powell indicated a high threshold for additional rate hikes. However, he also highlighted a ‘lack of further progress’ towards the Fed's inflation objective, which needs to be seen before considering rate cuts.
“This has been echoed by a slew of Fed officials' comments lately, with the high-for-longer rate outlook likely to be reiterated in the upcoming minutes.
“The minutes will be slightly backwards-looking, given that they will not factor in the recent patch of softer economic data, including weaker-than-expected jobs growth and cooler inflation data, which have bolstered hopes of Fed rate cuts before year-end.
“Nevertheless, clues will be sought from the minutes on the timeline for possible rate cuts and policymakers' views on the inflation and growth outlook.
Good time to buy on ASX?
WithinWealth Within chief analyst Dale Gillham thinks now might be the time to seize market opportunities when it comes to Aussie shares.
“This week, the All-Ordinaries index has risen strongly, trading up over one and a half per cent as of writing. This is great news, especially after last week's nice rise, as it showcases that the strength of buyers may be here for the longer term," he said on Friday.
“In my previous report, I highlighted the resurgence of buyer dominance was particularly evident after finding support at the critical 7,800 level. However, despite this support, uncertainty loomed, given that last week marked the first up week since late March.
“So, with the continued momentum from buyers this week, it's becoming increasingly evident that we're on the brink of breaking the all-time high in the next week or so.
“Additionally, while I previously entertained the possibility of a mid-year low in May or June, the current strength of buyer activity suggests otherwise. It's now more plausible that April marked our mid-year low, signalling a potential entry into the next bullish phase — a particularly thrilling prospect.
“While I've previously identified 8,200 to 8,400 as probable next targets for our market, it's imperative to closely monitor the reaction of the All Ords when it breaks the all-time high.
“This will offer insights into the level of bullish sentiment that we can anticipate heading into the third quarter, which historically is a period marked by market declines, notably into September or October.
“If the market breaks above the all-time high and maintains its strength beyond June, the next significant market falls will likely be postponed until September to November.
“Therefore, if you haven't already prepared to seize the market opportunities that will present, now is the time, or you risk missing out on one of the few significant buying opportunities remaining this year.”
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