Australian shares post record close as financials surge
The Australian dollar is buying 65.05 US cents, up from 64.41 US cents on Friday at 5pm, but still seemingly unable to break above 65.40 US cents, after a tepid rebound in consumer sentiment boosted the likelihood of more Reserve Bank interest rate cuts.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
17 minutes ago
- News.com.au
‘Renewed hope': ASX200 climbs to record high on Wednesday morning
Australia's sharemarket has opened at a new record high to start Wednesday's trading, as investors count on a China- US trade deal and further interest rate relief from the central bank. The benchmark ASX200 surpassed 8630 points shortly after the opening bell, beating the previous high of 8615 set back on February 14. IG Market analyst Tony Sycamore told NewsWire sharemarkets were climbing a 'wall of worry', with a number of misses economically leading to renewed hopes for rate cuts. 'When you put the weak China number together with weak consumer confidence in Australia and dig below the surface in the US job numbers, it is probably arguing for more rate cuts from central banks, which is probably the hope that drives these stock markets,' he said. 'Along with hopes of trade deals, that is why we are still near a record high.' In China deflation deepened to its worst level in almost two years in May, while US job figures came in hotter than expected, although this was only due to the participation rate plummeting. There were also renewed hopes of a trade talk between the US and China, with investors hoping a deal can be worked out between the two largest economies ahead of the July tariff deadlines. US President Donald Trump announced on April 2 a global tariff policy on just about every trading partner on the basis of evening up the US trade deficit. Mr Trump eventually paused the majority of his tariff policy for 90 days due to the damage that was being done to his own economy and money markets. He also faced a challenge in the federal courts over his use of power. Global markets are now factoring in trade talks between the US and China will happen as representatives from each of the two largest economies meeting in London for trade talks. Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer will remain in London to continue negotiations with Beijing, as senior officials return home. `~ Mr Lutnick said the talks had been 'productive.' Domestically, Australia's latest Westpac Consumer sentiment index has been released, showing Australians are feeling 'cautiously pessimistic.' Mr Sycamore said weak consumer confidence showed the Reserve Bank of Australia needed to do more to help lift household spending and could lead to a rate cut in July, with lowering interest rates likely good for Australia's financial sector. 'If rates fall back to 3.1 per cent, which is close to where we think neutral is for the RBA, that improves affordability which adds more demand for credit for the big banks,' he said. 'What happens to their margins? I don't think there's much of a difference between 3.85 or 3.1 per cent, there's still enough fat on the bone to make their generous profits.'
West Australian
30 minutes ago
- West Australian
Penny Wong spruiks PM's gift of the gab ahead of high stakes Trump meet
Foreign Minister Penny Wong has praised Anthony Albanese's gift of the gab ahead of the Prime Minister's first face-to-face with Donald Trump. NewsWire understands the two leaders are set to meet on the sidelines of the G7 in Canada starting later this week but a time has not been confirmed. With a tariff carve out and defence spending straining relations between Canberra and Washington, Mr Albanese has no shortage of uncomfortable talking points for the US President. But Senator Wong said on Wednesday Mr Albanese was 'pretty good at handling meetings'. 'He's had a lot of experience, not just as prime minister but as a senior minister for a very long time,' she told Nine. 'Look, we don't agree with the President Trump's administration on tariffs. 'We've made that clear. We think it's not consistent with our free trade agreement. 'We don't think it's in the interests of American consumers. 'We think it's an act of economic self-harm. We've made that clear publicly, consistently, and we will continue to do so.' Senator Wong refused to 'speculate' if bumping up Australian defence spending — which the US has demanded be hiked to 3.5 per cent of GDP — would be on the table. 'We'll always do what is required to keep Australians safe,' she said. 'We've invested more money in defence over the next few years, and also forward over the (next) ten.' Senator Wong added that the Albanese government was 'very aware of the circumstances Australia faces' and that building up ties with Pacific neighbours was key to the strategy. 'A great part of my job is to work with other countries because those relationships contribute to stability and security in our region, which is where stability, security and ultimately our prosperity come from,' she said. More to come.
West Australian
30 minutes ago
- West Australian
JACKSON HEWETT: Australia's appeal to global capital, if it gets the settings right, could see flood of funds
Australia is in the box seat to receive a flood of capital seeking refuge from economic turbulence in the United States, according to some of the country's largest investors. At a symposium hosted by the Australian Securities and Investments Commission, Future Fund chief executive Dr Raphael Arndt said many of the world's largest fund managers are heavily exposed to US assets and are now looking for more stable jurisdictions to diversify. 'In the listed markets, the US is somewhere between 60 and 70 per cent of global market cap... in private markets, it's even more,' Dr Arndt said. 'So every investor in private markets in the world has a huge exposure to the US. Many investors, including us, are thinking hard about how we should diversify that exposure. Australia is right up there in terms of attractive investment destinations, alongside parts of Europe and Japan.' That sentiment was echoed by ASIC chair Joe Longo, who said recent discussions in Washington DC and Doha revealed Australia was seen as a safe harbour. 'Australia is seen as a sophisticated market, with strong rule of law and institutions. I'm certain that Australia has a real opportunity here, if we play our cards right,' Mr Longo said. The increased capital interest could drive further momentum in Australia's already buoyant equity market, which hit near-record highs this week despite volatility in global equities triggered by US President Donald Trump's new round of tariffs. But it's not just equities that may benefit. Panel participants noted that private investment markets are also experiencing rapid growth — particularly in private credit, where both demand for yield and investor appetite for uncorrelated returns are driving activity. Australia's largest super funds, such as AustralianSuper and Australian Retirement Trust, now invest around 30 per cent of their portfolios into unlisted assets encompassing infrastructure, private equity, property, and private credit. The Future Fund, which does not publish returns in the same way, also maintains substantial allocations to private markets. Jason Collins, Australian head of investment giant BlackRock, which manages $US11.6 trillion ($17.7 trillion) globally, said his firm had $280 billion in Australian public and private assets. Over the past five years, BlackRock had significantly expanded its private markets operations, deploying $30 billion across 50 local investments — a move Mr Collins said was driven by structural changes in the global economy. 'Governments around the world have high debt to GDP levels — above 90 per cent globally,' Mr Collins said. 'The US is under 125 per cent, Japan over 200 per cent. Governments also have reducing tax bases. In 22 of the 27 EU member states, the working age population is declining. In Australia, one in 10 people will retire in the next 10 years. 'So with high debt to GDP and a lower taxation base in the future, there's a real need for private capital to meet some pretty critical needs in the global economy, especially in infrastructure. That's the thinking behind our private markets expansion.' Global investor appetite has followed, and Australia is increasingly attractive, with 80 per cent of the capital flowing to Australia via BlackRock from international investors. 'Earlier in my career I was selling BlackRock to Australians. Now I sell Australia to BlackRock,' he said. ASIC has welcomed the interest in Australian assets but is also keen to understand the extent to which they are reshaping Australians' investment opportunities. While listed equities remain dominant at $3 trillion, private capital has surged 161 per cent over the past decade to $148 billion. With initial public offerings at a 20-year low in 2023, ASIC this week announced new regulations to fast-track the listing process. Even so, the panel noted, private markets are increasingly appealing as equity markets become more concentrated. That trend is partly driven by the rise of large superannuation funds, which are so closely benchmarked under the government's MySuper performance tests that they predominantly track the ASX index, investing heavily in top companies. Matthew Michelini, head of Asia Pacific for private equity firm Apollo Global, which manages $US785 billion, described the Australian market as a concentrated bet on a few miners and four major banks. He said that global monetary policy over the past two decades had channelled excess liquidity into financial markets, distorting public equities. 'Most of that surplus went into financial markets. There are very few places that can absorb that. So public markets, by and large, became indexed, correlated, concentrated, driven by passive money,' Mr Michelini said. As a result, traditional portfolio construction of 60 per cent equities and 40 per cent bonds no longer offers the same diversification. Investors are turning to private markets in search of uncorrelated returns. 'Public markets aren't particularly good places to fund a growth company that has to reinvest in its own business or acquire businesses to turn around,' Dr Arndt said. 'That's how you create a lot of value as an investor, and that's why we would expect higher returns in private markets.' However, ASIC has raised concerns about transparency in private investment, especially in private credit markets. Commissioner Simone Constant said several submissions to ASIC's inquiry warned about the lack of visibility. 'What did surprise me, actually, was the number of submissions that said this is something you should be worried about,' she said. 'It may not be a problem now, but you need to understand the size of this wall of money in case it becomes one.' Ms Constant also noted the sheer size of private enterprise in Australia. 'One of the numbers that stood out to me was that 96 per cent of Australian companies earning over $100 million a year are private. That's really significant when you look at the employment numbers; it's about 85 per cent of people employed in the private (sector)'. With one in ten Australians set to retire over the next decade, demand for higher-yielding private investments is likely to grow. Global giants like BlackRock and Apollo are looking to expand access, but the lack of data and investor understanding remains a risk. Peter Warne, a non-executive director at UniSuper and chair of Virgin Australia, said improving valuation standards for unlisted assets was crucial to building trust. 'One of the big triggers for the GFC was the poor mortgage lending market in the US. That was all done at the state level, and no one was collecting the data,' Mr Warne said. 'The Federal Reserve didn't actually know how big this thing was until it blew up. I think we'd all be better off with more data to assess whether systemic risks are building.'
