A file photo of the ASX board
The share market has recorded its highest close since the opening day of 2024. Image by Joel Carrett/AAP PHOTOS
  • financial markets

Days of gains for Australian shares as miners dig deep

Jacob Shteyman January 25, 2024

The local share market has extended its winning streak to a fifth day, hitting its highest close since the opening session of 2024.

The benchmark S&P/ASX200 index on Thursday finished up 36.2 points, or 0.48 per cent, to a three-week high of 7,555.4.

The broader All Ordinaries rose 37.1 points, or 0.48 per cent, to 7,785.2.

Miners outperformed for the second day running. 

Iron ore futures rallied after China’s central bank announced it would cut the reserve ratio requirement – which is used to control the supply of money in the economy and influence interest rates – by 0.5 percentage points.

“There is also growing expectation that Chinese authorities will consider a package of measures to stabilise the slumping equity market,” ANZ Research economists Brian Martin and Daniel Hynes said.

Data showed Chinese demand for iron remained weak, with steel stockpiles rising 6.7 per cent in recent weeks, the pair said.

Heavyweight iron ore miner BHP gained 1.5 per cent and Rio Tinto lifted 2.8 per cent.

Fortescue Metals climbed two per cent after the Andrew Forrest-led company reiterated production guidance for fiscal 2024.

Mineral Resources jumped 7.1 per cent after the lithium miner kept volume and cost guidance unchanged, saying all assets remain profitable despite subdued ore prices.

“Specifically for lithium, the continued improvement in production and sales volumes and unit-cost performance was a standout and reinforces our view that operationally both Mt Marion and Wodgina have turned the corner,” RBC Capital Markets analyst Kaan Peker said.

Technology stocks were the biggest losers, despite their US counterparts continuing a hot streak overnight.

The tech-heavy Nasdaq hit a record high for the fifth session in a row amid ongoing optimism around artificial intelligence and the prospect of Federal Reserve rate cuts.

Netflix shares surged more than 10 per cent after the streaming service announced it had signed 13.1 million new subscribers in the December quarter.

Domino’s Pizza plunged 28.5 per cent to a four-year low after the fast food chain withdrew its guidance for financial year 2024 amid a slump in sales in Asia and France.

Oil and gas giant Santos climbed 0.8 per cent after announcing its troubled Barossa gas project would require an extra $200-$300 million in capital expenditure after it was delayed by a court trial brought on by traditional Tiwi owners.

Jarden energy analyst Nik Burns said the market would be pleased to see a “modest” five to seven per cent cost overrun but risks remained in the form of fluctuating commodity prices, further capital expenditure blowouts and the potential for the proposed Woodside merger to fall over.

ResMed soared 6.4 per cent higher after the sleep apnoea device manufacturer beat analyst earnings expectations for the December quarter.

“Pleasingly, volumes were strong but more importantly we are starting to see some solid gross profit margin recovery which has been our key focus,” said Andrew Dale, portfolio manager at ECP Asset Management.

The big banks were mixed, with CBA up 0.1 per cent, ANZ 0.3 per cent and Westpac 0.6 per cent, while NAB dropped 0.3 per cent.

While the US reporting season continues in earnest over the Australia Day long weekend, domestically investors will turn their attention to next week’s quarterly inflation data, which will have an outsized influence on the Reserve Bank’s February interest rate decision.

The Australian dollar was buying 65.76 US cents, from 65.71 US cents at Wednesday’s ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index finished Thursday up 36.2 points, or 0.48 per cent, to 7,555.4.

* The broader All Ordinaries climbed 37.1 points, or 0.48 per cent, to 7,785.2.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 65.76 US cents, from 65.71 US cents at Wednesday’s ASX close

* 97.16 Japanese yen, from 97.18 Japanese yen

* 60.47 Euro cents, from 60.52 Euro cents

* 51.74 British pence, from 51.76 pence

* 107.68 NZ cents, from 107.72 NZ cents.