ASX rallies as CBA hits record high; The Star suspended from trading (2024)

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket rallied to finish stronger on Monday after stocks on Wall Street finished broadly higher as the market closed out its fourth straight winning month with solid gains.

The S&P/ASX 200 overcame an early drop to gain 18 points or 0.2 per cent to 8,109.90, setting a new 20-day high, with seven sectors in the green, led by financials and energy, both up 1.1 per cent, while communication stocks dropped 0.9 per cent and materials lost 1.1 per cent in another weak showing for most of the mining giants.

The lifters

Miner Yancoal was one of the biggest large-cap advancers, up 3.9 per cent, followed by health insurer Medibank, gaining 3.4 per cent at the close. Market operator ASX Ltd closed the day 2.6 per cent higher.

The big four banks all finished higher on Monday, led by CBA, Australia’s largest company, which grew 1.6 per cent to hit a fresh record high of $141.77 a share, bringing its total value to $237.3 billion. Woolworths also posted a solid session (up 0.4 per cent) after announcing it had sold its remaining 4.1 per cent stake in alcoholic drink and pub operator Endeavour Group for $383 million.

The laggards

Real estate listings giant REA Group slumped 5.3 per cent, after the company said it was considering making an offer for UK-listed property website Rightmove. REA said that further to speculation in the media, it was considering a possible cash and share offer for Rightmove, which has a market capitalisation of £4.4 billion ($8.5 billion).

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Pilbara Minerals fell 4.4 per cent, followed by Mercury Energy, down 4.1 per cent. The big miners all suffered after the price of iron ore fell to near $US100 per tonne overnight. Rio Tinto lost 1.4 per cent, while BHP fell 1.1 per cent, and Fortescue was down 0.5 per cent at the close.

As earnings season wound down, jeweller Michael Hill plummeted 3.6 per cent, after reporting a small post-tax loss, as increasing revenue in its Australian business was offset by a drop of 11.8 per cent in its New Zealand market.

The lowdown

Novis Capital senior investment adviser Gary Glover said the Australian market continued to be buoyed by expectations the US Federal Reserve will cut interest rates later this month, and had shown “robust” growth.

“The financials, that’s the part that sort of doesn’t make sense to anyone,” he said. “These things shouldn’t be trading as high as they are, but the market’s got the wind behind its back at the moment.”

He said losses in the materials sector continued to be a knock-on effect of a weakened Chinese economy on lithium and iron ore prices, saying prices were “getting pretty close to the bottom”, but might rebound if smaller producers were forced to put mines into maintenance, reducing supply.

Glover said he thought the market’s reaction to REA’s announcement about taking over its UK counterpart reflected the country’s lack of being “a happy hunting ground” for Australian businesses.

“That’s not to say that REA can’t make it happen,” he said.

Star Entertainment Group shares did not trade on Monday after the ASX suspended the casino group for failing to post its financial results within the reporting period.

The Aussie dollar was buying US67.81¢.

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In the US, a late-afternoon rally on Friday helped stocks bounce back from a mid-afternoon slide. The S&P 500 rose 1 per cent, with about 76 per cent of the stocks in the index notching gains. The Dow Jones rose 0.6 per cent, setting its fourth all-time high this week. The Nasdaq composite ended 1.1 per cent higher.

Wall Street spent the day mulling over encouraging reports on inflation, consumer spending and income.

The Commerce Department said its personal consumption and expenditures report showed prices rose just 0.2 per cent from June to July, up slightly from the previous month’s 0.1 per cent increase. Compared with a year earlier, inflation was unchanged at 2.5 per cent.

US stock exchanges will be closed on Monday for the Labor Day holiday.

with AP

Tweet of the day

Quote of the day

“Extremist groups and digital militias,” said Brazilian Judge Alexandre de Moraes as he froze X’s finances in Brazil, have used the platform for “massive dissemination of Nazi, racists, fascist, hateful and anti-democratic speech”.

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