ASX soars on interest rate cut speculation

Yahoo

2 days ago

Surging commodity prices, strong ASX results and widely predicted interest rate relief all helped drive the ASX higher during Monday's trading.
The benchmark ASX 200 index gained 37.70 points or 0.43 per cent to 8844.80, after briefly touching a record intraday high of 88852.30 points.
The broader All Ordinaries also gained 41 points or 0.45 per cent to 9117.60.
The Aussie dollar last traded around US65.26c.
On an overall positive day, nine of the 11 sectors gained, led by the materials, consumer staples, healthcare and major banks.
Lithium miners led the gains with Mineral Resources up 12.18 per cent to $38.12, Pilbara Minerals soaring 19.69 per cent to $2.31 and Liontown Resources jumping 18.34 per cent to $1.
Investors bought the sector on the back of Chinese battery giant Contemporary Amperex Technology suspending production at one of its key mining sites.
Iron ore miners jumped after futures markets lifted the price of the commodity by 1.1 per cent after Beijing scrapped longstanding restrictions on the number of homes that city residents can buy in a suburban area.
BHP gained 1.64 per cent to $40.87, Rio Tinto finished 1.47 per cent higher at $115.29 and Fortescue soared more than three per cent to $19.42.
It was also a strong day for the big four banks.
CBA jumped 1.13 per cent to $178.60, NAB gained 0.86 per cent to $38.82, Westpac climbed 1.93 per cent to $34.31 and ANZ finished in the green up 1.17 per cent to $31.24.
Moomoo chief executive Michael McCarthy said Monday's jump was on the back of rates, with a refusal to move on them tomorrow afternoon likely to heavily impact the market.
'There are very high expectations of an interest rate reduction from the Reserve Bank of Australia tomorrow afternoon,' he said.
'Bank bill traders are pricing a possibility or a cut greater than 0.25 per cent.
'What many analysts seem to overlook is that just because the RBA can cut, doesn't mean it will cut.
eToro market analyst Farhan Badami said while the July pause took everyone by surprise, banks have already started moving to cut interest rates ahead of tomorrow's meeting.
'While the July pause was a surprise, a consecutive pause in August will be a shock,' he said.
'Three cuts before the end of the year are still expected, but there's very little wiggle room left in the calendar if the RBA heightens its degree of risk aversion any further.'
In company news, JB Hi-Fi chief executive Terry Smart will step away after more than two decades with the retail giant.
The announcement came at the same time as the electronics giant reported a 10 per cent growth in sales to $10.6bn for the last financial year, while net profits after tax jumped 5.4 per cent to $462.4m.
But the news of the big boss leaving the company outweighed the strong results with shares falling 8.39 per cent to $107.83.
Car classified business Car Group announced a 10 per cent increase in net profit after tax to $275m, in the 2025 financial year.
Shares finished up 0.54 per cent to $37.20.
Defence business DroneShield shares also finished higher after telling the market it launched SentryCiv, a subscription-based artificial intelligence powered counter drone system. This is aimed at the civilian market.
Despite initially surging, shares closed flat at $3.95 on the announcement.