ASX rises despite Wall Street hit by crypto slump
staff reporter
Updated ,first published
The Australian stock market closed in the green, driven by the rise in share prices of mining giants and energy companies, despite Wall Street’s negative lead.
The S&P/ASX 200 index closed at 8579.70, up 0.2 percent or 14.50 points; With the increase in commodity prices, five out of 11 sectors in the market increased, especially mining and energy.
“There was one real standout in today’s session, and that was largely due to our mining and energy stocks tracking strong commodity prices,” CommSec market analyst Laura Besarati said.
“We have seen oil prices gain ground amid geopolitical risks to supply in the wake of Ukraine drone strikes, we have seen gold touch a six-week high amid bets on a US rate cut… and both copper and silver have climbed to new highs.”
The 1.1 percent gain in the energy sector came as Woodside and Santos shares rose, driven by stronger crude oil prices as investors continued to weigh the conflict in Ukraine against recent supply glut concerns.
Coal miners also rose; Yancoal and Whitehaven increased by 3.4 percent and 2 percent respectively. Metallurgical coal producer Stanmore had the second best performance in the top 200 with a gain of 3.9 percent.
BHP (up 1.1 per cent) and Rio Tinto (up 1.7 per cent) led the materials sector up 0.7 per cent, supported by iron ore futures rising to four-week highs before settling just above US$107 per tonne.
Financial stocks were mixed; Commonwealth Bank (up 0.4%), National Australia Bank (up 0.8%) and ANZ Bank (up 0.1%) rose, while Westpac lost 0.4%. Investment giant Macquarie Group also closed in the red, down 1.2 percent.
German prosecutors have charged a banker with Macquarie Group in connection with the Cum-Ex tax scandal, Bloomberg reported Tuesday; This is the first indictment targeting staff at a top international investment bank. Cologne-based prosecutors filed a criminal complaint in a court in Bonn over the lender’s transactions before 2012, according to sources familiar with the matter.
Buy now, pay later providers have come under selling pressure as attorneys general in seven US states launched an investigation into the industry and Zip fell 10.6 percent.
In earnings news, KFC’s operator in Australia, Collins Foods, fell 3.5 per cent after earnings results showed statutory net profit rising 12.7 per cent to $27.2 million.
Market operator ASX Limited rose 1.3 per cent, a day after an embarrassing technical glitch prevented dozens of companies from issuing notices to investors and led to a temporary halt to trading in shares. The ASX reported on Monday night that the issue had been largely resolved, but investors said it was a blow to the exchange’s reputation at a time when it was already under scrutiny following a series of problems.
The Australian dollar was trading at US65.52¢ at 12.55am AEDT.
U.S. stocks have given back some of last week’s rally as Bitcoin and other former stars of Wall Street fell again. The S&P 500 lost 0.5 percent on Monday, breaking its five-day winning streak.
The Dow Jones fell 0.9 percent and the Nasdaq composite fell 0.4 percent.
Crypto-related stocks fell to some of the sharpest losses after Bitcoin fell below $86,000. Stock prices have also generally felt the pressure from rising yields in the bond market. Treasury yields rose along with yields around the world after the governor of the Bank of Japan signaled an increase in interest rates.
Last week’s rise was largely driven by growing hopes that the Fed will cut its key interest rate next week to support a slowing job market. Such hopes remain high, with traders estimating there is about an 88 percent chance the Fed will cut rates at its next meeting, according to data from CME Group.
Bitcoin, which rose to around $125,000 in October, fell below $86,000, down nearly 7 percent from the previous day.
This caused stocks in the crypto industry to fall. Coinbase Global fell 4.8 percent and Robinhood Markets fell 4.1 percent.
Meanwhile, the market has had a mixed reaction to what looks like a strong start to the holiday shopping season. Consumer spending during Black Friday and Cyber Monday was expected to beat expectations for retail sales, despite uncertainty about the outlook for the U.S. economy.
Ross Stores rose 0.7 percent and Williams-Sonoma rose 1.4 percent. But Best Buy fell 2.6 percent.
Indices in foreign stock markets followed a mixed course due to the sharp movements.
France’s CAC 40 Index lost 0.2 percent, partly driven by a 5.7 percent loss for Airbus.
The European aviation giant said most of its fleet of 6,000 A320 passenger jets had received an update following a software glitch over the weekend that could affect flight controls. It also announced a new issue affecting its A320neo aircraft on Monday.
With AP, AAP, Bloomberg
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