Data centre owner Goodman Group (up 2 per cent) led property stocks higher after US tech giant Oracle gave an aggressive outlook for its cloud infrastructure business, stunning Wall Street and galvanising hopes that the post-ChatGPT global AI infrastructure build-out was accelerating.
The laggards
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Shares of mining giants BHP (down 1.2 per cent) and Rio Tinto (down 2 per cent) fell on the news that London-listed miner Anglo-American and Canada’s Teck Resources planned to tie up to forge an $75 billion global copper-focused heavyweight.
The mega-deal comes after Anglo last year rejected a £39 billion ($80 billion) takeover bid from BHP, while in 2023, Teck turned down a $US22.5 billion ($34 billion) offer from Glencore. Early-stage talks between Rio Tinto and Glencore also fell through late last year.
The copper tie-up announced overnight could spur BHP and Rio to action with bids of their own as they scramble to secure scale in an industrial metal critical for industries from electric vehicles to data centres, investors said. Control of future-facing metals could define the industry’s winners over the next decade.
“Both BHP and Rio would like more copper if they could get it, although they may blink at the prices now,” said Ian Woodley, a fund manager at Old Mutual.
Other miners were also struggling, with BHP’s iron ore rival Fortescue down 2.4 per cent. Gold producer Northern Star lost 0.3 per cent even as gold pushed higher toward a record as traders evaluated US data that strengthened the case for Federal Reserve interest rate cuts. Its peers Evolution Mining (up 0.1 per cent) and Newmont (up 0.5 per cent) fared somewhat better.
Liontown was the day’s biggest loser, slumping 18.2 per cent, with Pilbara Minerals close behind, losing 16.9 per cent and Iluka Resources down 14.4 per cent.
Shares of pallet maker Brambles (down 0.7 per cent), Medibank (down 0.8 per cent) and bedding retailer Adairs (down 0.4 per cent) declined as they traded ex-dividend.
The lowdown
After a wobbly start in morning trade, Australian shares edged higher, joining gains in Asian markets as the woeful day for the mining sector was eclipsed by strength in the banks and other sectors.
Technology shares including Taiwan Semiconductor Manufacturing and Tencent Holdings led Asian markets higher after Oracle shares surged to a record high in extended trading, following the company’s aggressive outlook for its cloud business.
The gains on the ASX came after Wall Street rose to new all-time highs overnight as a discouraging jobs market report fuelled speculation it could prompt the Fed to cut interest rates for the first time this year. Investors are hoping for a slowdown deep enough to get the US central bank to cut rates, but not so overwhelming that it causes a recession.
Traders have become convinced that the Federal Reserve will cut interest rates at its next meeting in a week.Credit: Bloomberg
The S&P 500 rose 0.3 per cent after bobbing earlier in the morning around its all-time high set last week. The Dow Jones jumped 0.4 per cent, and the Nasdaq composite added 0.4 per cent.
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Traders have become convinced that the Fed will cut rates at its next meeting in a week to prop up the slowing job market. The report overnight offered the latest signal of weakness as the US government revised down its count of new jobs across the country through March by 911,000 jobs.
The local raw materials sector slumped 1.7 per cent after the jobs figures revision reignited fears about global growth and commodity demand.
“To put the size into context, the revisions imply that monthly job growth was roughly half of what was indicated previously,” ANZ senior economist Bansi Madhavani told the ANZ 5 in 5 podcast.
“The data will support the statement that the labour market is slowing and the Fed will resume cutting rates in September.”
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The bet on Wall Street is that such data will convince Fed officials that the job market is now the biggest problem for the US economy, pushing them to cut the Fed’s main interest rate, a move that would give the economy a boost but could also send inflation higher.
A lot is riding on Wall Street’s hope that the job market is slowing by just the right amount: investors have already sent US stock prices to records because of it.
Fox shares dropped 6.7 per cent after Rupert Murdoch’s family said they had reached a deal on who will control of the media empire when he dies. The agreement ensures there will be no change in direction at the Fox News, the most popular network for Donald Trump and conservatives.
