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Sigma goes skyward

Daily Market Update

Australia’s sharemarket pushed higher on Wednesday, as the big miners tracked iron ore prices higher. At the close the S&P/ASX 200 was up 23.8 points, or 0.3 per cent, to 7,259.1 points, while the broader All Ordinaries index gained 22.7 points, also 0.3 per cent, to 7,469.1.

On the industrial side, the highlight of the day was Sigma Healthcare shares surging 27.5 cents, or 36 per cent, to $1.04, suggesting that the combined business with Chemist Warehouse is worth almost $11 billion. Sigma shares were up more than 70 per cent at one stage.

  • Biotech Neuren gained $1.05, or 6.5 per cent, to a record high of $17.14 on heightened speculation that it is being eyed off by big US pharmaceutical companies, because it offers a unique solution for a rare disease, and has hit all of its milestones.

    The Big Four banks were all in the green, with Westpac rising 20 cents, or 0.9 per cent, to $22.14; Commonwealth Bank advancing 74 cents, or 0.7 per cent, to $108.15; ANZ spiking 19 cents, or 0.8 per cent, to $24.99; and National Australia Bank accruing 24 cents, also 0.8 per cent, in its case to $29.76. Global investment bank and wealth manager Macquarie Group added $2.57, or 1.5 per cent, to $172.37.

    Insurance companies also struggled, with IAG down 19 cents, or 3.2 per cent, to $5.71; and Suncorp losing 14 cents, or 1 per cent, to $13.83. Global insurer QBE eased 1 cent, to $14.45.

    In retail, Beacon Lighting lit up a spectacular 18 cents, or 8.1 per cent, to $2.40, in one of the best performances of the day, on no news – simply restoring what it lost on Tuesday. JB Hi-Fi gained 58 cents, or 1.2 per cent, to $50.20; Universal Store strengthened 9 cents, or 2.5 per cent, to $3.74; Cettire rose 7 cents, or 2.6 per cent, to $2.81; and Premier Investments rose 34 cents, or 1.3 per cent, to $26.37.

    Biotech heavyweight CSL gained $2.84, or 1 per cent, to $272.34.

    Casinos found some favour, with Star Entertainment up 2 cents, or 4.4 per cent, to 48 cents, and Auckland operator Skycity gaining 4.5 cents, or 2.8 per cent, to $1.68.

    Iron steels the resources stocks

    The resources sector firmed 0.3 per cent as investors pushed shares in iron ore heavyweight Fortescue 35 cents, or 1.3 per cent, northward, to a record high of $27.08, as iron ore prices continue to defy expectations at more than $US135 a tonne. Rio Tinto rose 97 cents, or 0.8 per cent, to $129.50, while BHP advanced 31 cents, or 0.7 per cent, to $47.87.

    Energy stocks were under pressure from weaker oil prices, with Woodside weakening 32 cents, or 1.1 per cent, to $30.02; putative merger partner Santos easing 1 cent, to $7.30; and Beach Energy erasing 3 cents, or 2 per cent, to $1.475.

    Goldminers felt the pinch as the yellow metal traded lower. Gold Road Resources retreated 7 cents, or 3.7 per cent, to $1.81; Bellevue Gold lost 6 cents, or 3.6 per cent, to $1.63; Perseus Mining slipped 6.5 cents, or 3.5 per cent, to $1.78; Newmont fell $1.66 , or 2.8 per cent, to $57.42; De Grey Mining lost 2.5 cents, or 2 per cent, to $1.21; Ramelius Resources shed 3 cents, or 1.9 per cent, to $1.56; and Evolution Mining gave up 5 cents, or 1.4 per cent, to $3.56.

    It was not a great day in the coal sector, where Coronado Global Resources softened 6.5 cents, or 3.8 per cent, to $1.64; Whitehaven Coal was down 19 cents, or 2.6 per cent, to $7.16; New Hope Corporation lost 11 cents, or 2.2 per cent, to $4.97; Yancoal Australia shed 10 cents, or 2 per cent, to $4.80; and Stanmore Resources walked back 4 cents, or 1.1 per cent, to $3.78.

    In lithium, producer Pilbara Minerals eased 1 cent, to $3.49; fellow producer Allkem managed a 2-cent gain, to $9.15; IGO, which mines nickel and lithium, gave up 19 cents, or 2.5 per cent, to $7.52; while Mineral Resources, which produces iron ore as well as lithium, lifted 49 cents, or 0.8 per cent, to $61.51.

    Aluminium and alumina producer Alumina rose 2 cents, or 2.6 per cent, to 80.5 cents; mineral sands producer Iluka fell 11 cents, or 1.6 per cent, to $6.72; and Africa-based uranium miner Paladin Energy moved one cent higher, to 95.5 cents.

    Fed rates guidance ignites Wall Street

    In the US, the blue-chip Dow Jones Industrial Average surged to a record high overnight, as the Federal Reserve signalled that it would cut rates several times next year. The 30-stock Dow gained 512.30 points, or 1.4 per cent, to close at 37,090.24. This marks the benchmark’s first-ever close above the 37,000 mark.

    The broader S&P 500 index closed 63.39 points, also 1.4 per cent, higher, passing 4,700 for the first time since January 2022. The tech-heavy Nasdaq Composite index made it a trifecta, also appreciating 1.4 per cent — in its case a rise of 200.57 points, to 14,733.96.

    The Federal Reserve held the US benchmark overnight borrowing rate steady in the 5.25 per cent–5.5 per cent range, as expected, but more importantly, the central bank forecast three rate cuts in 2024. 

    On the bond market, the US ten-year yield gave up 17.9 basis points, to 4.025 per cent, while the 2-year yield – considered more sensitive to changes in policy – was down 30.2 basis points, at 4.433 per cent.

    Gold jumped US$44.92, or 2.3 per cent, to US$2,027.51 an ounce; the global benchmark Brent crude oil grade rose US$1.44, or 2 per cent, to US$74.68 a barrel; and US West Texas Intermediate oil added US$1.26, or 1.8 per cent, to US$69.87 a barrel.

    The Australian dollar is buying 66.62 US cents this morning, more than a full cent up on the 65.58 US cents at the ASX close on Wednesday.

    James Dunn

    James is an experienced senior journalist and host of The Inside Network's industry events.

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