It’s days like this that reinforce the importance of staying invested, participating in markets despite the negative headlines and bearish rhetoric, and, above all, remaining patient. With SPI futures flat this morning, investors took the bull by the horns, buying equities and pushing the ASX to its highest level since March as easing oil prices encouraged a rotation back into growth stocks, banks and healthcare. The rally was broad, with nine of the eleven sectors finishing higher and the local market comfortably outperforming modest gains in US futures.
Interestingly, recent data showed retail investors recorded their largest week of stock selling since 2022, while assets in leveraged ETFs fell 28%. We view this as constructive. Markets appear to be shifting away from speculative retail flows and back toward earnings, corporate demand and the macroeconomic backdrop. The removal of some excess leverage and speculative positioning should provide a firmer foundation for further upside.
Technology led the charge today after Wall Street’s mega-cap names rebounded strongly overnight, while the major banks attracted buying ahead of reporting season. The prospect of renewed US-Iran negotiations also helped reduce the immediate geopolitical risk premium, with Brent crude holding near US$84/barrel after falling almost 5% overnight.
- ASX 200: +126.52pts / +1.40% to 9,145.80
- AUD/USD: 0.7016 / +0.23%
- Best sectors: Information Technology +3.93%, Healthcare +2.36%, Financials +1.93%
- Worst sectors: Utilities -0.42%, Consumer Staples +0.15%, Consumer Discretionary +0.21%
- Credit Corp (CCP) -7% to $12.79 to fell sharply outside the displayed ASX 200 mover table despite reporting a 12% increase in profit, as investors focused on a tougher purchasing backdrop for its US debt-buying business and questioned whether recent growth rates can be sustained.
- DroneShield (DRO) +14.60% to $2.08 extended Monday’s strong rebound after JPMorgan increased its holding in the defence technology company.
- Life360 (360) +11.38% to $28.47 led the rally across technology and growth stocks as investors returned to higher-beta exposures following the overnight surge in US mega-cap technology names. We like and hold Life360 (360) here.
- 4DMedical (4DX) +8.59% to $4.30 continued its volatile recovery, while Megaport (MP1) +5.74% to $18.97 also benefited from improving sentiment toward AI infrastructure and data-centre-related companies.
- Pinnacle Investment Management (PNI) +7.51% to $17.76 rallied strongly ahead of results that are just about to land – we’ll cover them tomorrow morning.
- Lynas Rare Earths (LYC) +6.55% to $14.96 and Iluka Resources (ILU) +4.98% to $6.53 advanced as investors returned to critical-minerals exposures.
- Event Hospitality & Entertainment (EVT) +5.18% to $13.80, Zip Co (ZIP) +5.08% to $2.69 and SiteMinder (SDR) +5.06% to $3.53 were also among the strongest growth and consumer names.
- Healthcare rallied broadly, with CSL Ltd (CSL) +3.64% to $128.83, ResMed (RMD) +1.45% and Cochlear (COH) +1.31% all advancing.
- Technology was the strongest sector. Xero (XRO) +3.49% to $73.80 and WiseTech Global (WTC) +3.05% gained as investors reassessed the recent sell-off and the longer-term implications of AI disruption.
- Palantir (PLTR US) in the US reported strongly overnight and rallied +14% afterhours. This is a bellwether for AI-driven enterprise software – its results offering an important read on whether corporate enthusiasm for AI is translating into meaningful contracts and revenue.
- The major banks provided solid index support ahead of earnings season. National Australia Bank (NAB) +3.00% to $42.85, ANZ Group (ANZ) +2.36% to $38.17, Westpac (WBC) +1.70% to $38.82 and Commonwealth Bank (CBA) +1.59% to $180.72 all finished higher.
- CBA flagged that changes to its reporting methodology will increase the level of early-stage loan arrears disclosed in next week’s full-year result, although this reflects a broader definition rather than necessarily a sudden deterioration in credit quality.
- Macquarie Group (MQG) +3.13% to $263.19 also gained strongly as investors rotated back into financials and cyclical exposures.
- Rio Tinto (RIO) +1.71% to $172.39 and Fortescue (FMG) +1.57% to $18.08 advanced despite iron ore trading near a 13-month low. BHP Group (BHP) -0.33% to $60.52 was the notable laggard among the diversified miners.
- Iron ore briefly fell to around US$92.85/t, a level where some higher-cost production may begin to come under pressure.
- Citi estimates 15–40mt of annual supply could be at risk between US$90 and US$95/t, although prices may need to approach US$85/t to materially rebalance the market.
- Woodside Energy (WDS) +1.38% to $32.95 and Santos (STO) +0.91% rose despite weaker crude prices, while Ampol (ALD) -2.93% and Viva Energy Group (VEA) -3.58% to $2.69 declined.
- WEB Travel Group (WEB) -3.70% to $3.38 gave back part of its recent surge following last week’s positive earnings guidance and share-buyback announcement.
- The Lottery Corporation (TLC) -3.57% to $5.40, Tabcorp Holdings (TAH) -2.78% to $0.88 and Light & Wonder (LNW) -2.13% to $113.50 were among the weaker gaming names.
- GrainCorp (GNC) -2.30% to $5.53, Premier Investments (PMV) -1.48% to $13.27 and Guzman y Gomez (GYG) -1.38% to $24.98 also underperformed.
- Brent crude: around US$84/bbl, after falling almost 5% overnight as hopes for renewed US-Iran talks reduced the immediate geopolitical risk premium.
- Gold: around US$4,055/oz, holding broadly steady as traders weighed easing energy-driven inflation against the outlook for US rates.
- Iron ore: around US$93.90/t, near a 13-month low as weak Chinese steel margins and limited stimulus weighed on demand.
- S&P 500 E-mini futures: +19.75 points / +0.26%
- Dow E-mini futures: +108 points / +0.20%
