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The ASX 200 finished +0.4% higher on a fairly choppy Monday, which saw a very strong local market opening, eventually losing half of the early gains. The gains were very stock/sector specific, with only 6 of the main 11 sectors closing higher, but a stomping +2.6% session by the materials stocks was enough to drive the market higher, with gold equities again the shining light with the precious metal breaking well above the $US3,700/oz milestone.
The ASX traded higher to start the week, supported by strength across the resource complex as iron ore, copper, lithium and gold all pushed up, although the rally was trimmed from early highs as energy and financial stocks lagged.
US stocks have defied sceptics in 2025, surging to record highs despite a global trade war, fiscal uncertainty, and now September’s traditionally weak reputation. The S&P 500 has added $US16 trillion in market value since April, driven largely by Big Tech, notching ~30 records and rallying 38% in five months, a pace surpassed only four times in the last 75 years.
The ASX200 ended last week down 1% with only the rate-sensitive tech, consumer discretionary and utilities sectors taking some solace from the Fed’s 0.25% rate cut. The energy sector stood out in the losers enclosure, dropping 4% after Abu Dhabi National Oil Co’s investment arm, XRG, walked away from its $36.4bn bid for Santos (STO). The market traded in another tight 150-point/1.7% range as the Fed rate cut failed to deliver any meaningful lead.
The ASX opened with a bang this morning but closed with more of a whimper after the Bank of Japan held rates steady at 0.5% as expected but surprised markets by announcing plans to sell down its massive ETF and REIT holdings, weighing on Japanese equities (Nikkei -0.9%), and dragging the ASX back from early highs.
Chinese tech stocks posted a near four-year high on Thursday as AI-fuelled buying and a regulatory ban on an Nvidia Corp. chip boosted prospects for domestic rivals. The Hang Seng Tech Index rose as much as 2% on Thursday, before fading into the close, building on Wednesday’s 4.2% rally that marked its highest close since November 2021. Gains followed a Chinese regulator’s order to halt imports for Nvidia’s RTX Pro 6000D, seen as a boost for domestic chipmakers. Chinese chipmaker SMIC contributed the most to the tech index’s advance, with shares surging as much as 8.3% in Hong Kong. Hua Hong Semiconductor Ltd. jumped as much as 13%. Shares of Alibaba Group Holding Ltd. and Baidu Inc., which are developing their homegrown alternatives to foreign chips, also rose.
It was a weak session for the Australian share market as energy stocks collapsed following the news that Abu Dhabi National Oil Co had walked away from its $36bn bid for Santos, while a weaker than expected jobs report out at 11.30am this morning saw a rotation out of equities into safer havens, such as bonds, pushing yields lower. All ASX sectors finished in the red, bar a small gain from tech.
This morning, the Fed delivered as expected, while the rhetoric led to volatility but ultimately a mixed close for stocks:
• The Fed cut interest rates by 0.25% as expected and pencilled in 2 more cuts before Christmas.
• However, looking ahead at the outlook for additional rate moves, Powell was cautious, saying the Fed was now in a “meeting-by-meeting situation.”
• The vote was 11-1, with Governor Miran dissenting in favour of 0.5%; he will now be on Trump’s Christmas card list.
• Chair Jerome Powell pointed to growing signs of weakness in the labour market to explain why officials decided it was time to cut rates after holding them steady since December amid concerns over tariff-driven inflation.
The ASX gave back ground today after opening only a touch softer; selling quickly set in as traders sat on their hands amid a general risk off feel ahead of the Fed’s rate call tonight. The sharp selloff was met some buying at the ~8800 level, bouncing midmorning but tracked sideways into the afternoon.
