Miner and tech stocks lift ASX higher; Global AGL market rally stumbles on quarter collapse
Australian shares rose, led by gains in technology stocks that track the rise of Wall Street and mining stocks on fresh strength in commodity prices, while AGL Energy retreated after withdrawing plans to separate it.
the main points:
- AGL’s announcement reinforced the resignation of the Chairman and CEO
- Wall Street rebounded on better-than-expected US consumer spending data for April
- European shares hit a three-week high
The ASX 200 rose 56 points, or 0.8 per cent, to 7,239 at 12.18pm AEST.
The Australian dollar rose to 71.87 US cents at 12.19 pm EST.
Shares of AGL Energy fell 1.8 percent to $8.71 after news that the company canceled plans to separate its coal-focused generation business.
It prompted four senior board members to resign.
Technology shares led gains on the benchmark index, jumping more than 4 percent, tracking a strong rally on Wall Street from Friday, with Block and Xero shares up 9.6 percent and 5.2 percent, respectively.
Mining companies rose about 1.5 percent to reach their highest levels since April 29, with sector giants BHP Group, Rio Tinto and Fortescue Metals Group adding between 0.9 percent and 1.5 percent.
The financial sector added 0.1 per cent.
ANZ fell 0.2 percent to $25.63 after it sued ASIC for misleading its customers about how much they had left to spend on their credit card accounts.
Shares worldwide are trading up
Global markets enjoyed a broad-based rally on Friday.
Wall Street rallied after the data was released, with all three major US stock indexes putting a decisive end to their longest streak of weekly losses in decades.
The US Federal Reserve, in the minutes of its May meeting released earlier this week, described inflation as a serious concern.
The majority of central bankers supported two rate increases of half a percentage point in June and July, as the group tries to curb inflation without causing a recession.
The Fed has left room to pause in increases if the economy weakens.
Analysts said consumer spending and inflation data were encouraging and supported second-quarter growth estimates, which are mostly above the 2.0 annual rate.
“The growth engine for the US economy is still alive and kicking, and that’s important,” said Joe Quinlan, CIO head of market strategy for Bank Merrill and Bank of America Private.
Growth estimates for [the second quarter] Still good. There’s a better tone in the market than we’ve seen in recent weeks, with inflation likely to peak here. Maybe we can avoid stagflation.”
The MSCI World Stock Index, which measures stocks in 45 countries, rose 2.12 percent.
European shares hit a three-week high and rose 1.42 percent. Britain’s FTSE also reached a three-week high, and was headed for its best weekly showing since mid-March.
The Dow Jones Industrial Average rose 575.77 points, or 1.76 percent, to 33,212.96, the Standard & Poor’s 500 rose 100.4 points, or 2.47 percent, to 4,158.24 points, and the Nasdaq Composite increased 390.48 points, or 3.33 percent, to 12,131.13.
In the oil markets, Brent crude rose, trading at $119.72 a barrel by 10:52 AM ET.
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