TPG Telecom (up 2.2 per cent) was among the biggest large-cap advancers as it announced plans to cut costs and simplify its product range, and shares in MediBank advanced 2.6 per cent as it had momentum return to its business following its damaging data breach in 2022.
The financials sector (up 1 per cent) was stronger as all four big banks traded in the green. CBA (up 1.2 per cent), NAB (up 1.3 per cent), Westpac (up 1.4 per cent) and ANZ (up 0.5 per cent) all lifted.
Shares in Qantas (up 1.1 per cent) also took off after the airline posted a record $2.4 billion profit.
The laggards
Consumer staples (down 1.1 per cent) were weighed down by supermarket giants Woolworths (down 1.2 per cent) and Coles (down 0.5 per cent), as well as Treasury Wine Estates (down 0.7 per cent) and Endeavour (down 2.2 per cent).
Utilities (down 1.1 per cent) were weaker, with APA Group shedding 3.4 per cent and Meridian Energy losing 2 per cent.
Ramsay Healthcare (down 12 per cent) was the biggest large-cap decliner after halving its final dividend, followed by coal miner Whitehaven (down 5.1 per cent), which disappointed shareholders suspending its share buyback. Cleanaway Waste Management was down 4.1 per cent.
The lowdown
WealthLander chief investment officer Jerome Lander said Wall Street’s technology-heavy Nasdaq index provided a positive lead for Australia’s technology sector.
“[AI chipmaker] Nvidia’s results gave a big lead for equity markets in general,” he said. “There’s a lot of positive expectation priced into Nvidia, but it delivered good results.”
Nvidia, one of the US sharemarket’s most influential stocks, rallied 3.2 per cent, then rose another 8 per cent in extended trading after releasing its results.
Lander said Nvidia’s strength set a good tone for the market and signalled a return to more “risk on” sentiment.
Nvidia excited investors with its results posted after the close of trading.Credit: Bloomberg
“More money flowed back into the technology sector,” he said, whereas more defensive sectors such as consumer staples and utilities had money flow out.
On Wall Street overnight, the US market rallied on Wednesday to its best day since June after the pressure that built up on stocks from the bond market relaxed a bit.
The S&P 500 climbed 1.1 per cent to trim its loss for what has been a dismal August so far. The Dow Jones Industrial Average rose 184 points, or 0.5 per cent, and the Nasdaq composite jumped 1.6 per cent.
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Big Tech stocks and others that benefit from easier interest rates led the way. They got some relief as the 10-year Treasury yield eased back further from its highest level since 2007 after a report suggested the US economy might be cooling.
A 2.2 per cent gain for Apple’s stock and 1.4 per cent climb for Microsoft shares were two of the strongest forces pushing the S&P 500 upward.
Nvidia has rocketed into the constellation of Big Tech’s brightest stars while riding the artificial intelligence craze that is fuelling red-hot demand for its technology.
Nvidia’s revenue for its fiscal second quarter doubled from the same time last year to $US13.51 billion ($20.8 billion), culminating in a profit of $US6.2 billion, or $US2.48 per share, more than nine times more than the company made a year ago. The figures were well above the projections of analysts polled by FactSet Research.
And the momentum is still building. The California-based company predicted its revenue for its August-October quarter will total $US16 billion, nearly tripling its sales from the same time last year. Analysts had been anticipating $US12.6 billion in revenue for the period, according to FactSet.
Nvidia and just a handful of other companies were behind the majority of the S&P 500’s gains earlier this year. Many of those “Magnificent Seven” stocks also benefited from the AI frenzy.
They’ve been under more pressure recently, as yields crank higher in the bond market. When bonds are paying more in interest, investors feel less need to pay high prices for stocks and other investments that can swing sharply in price.
Treasury yields eased on Wednesday, taking off some of that pressure. The 10-year Treasury yield fell to 4.18 per cent from 4.33 per cent late on Tuesday.
The main event of the week for markets could be a speech on Friday by Fed Chair Jerome Powell. He will be speaking at an event in Jackson Hole, Wyoming that has been the setting for major policy announcements by the Fed in the past.
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With AP
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