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The Australian market pushes forward, with broad-based gains

Daily Market Update

The S&P/ASX 200 rose by 0.8 per cent, showing widespread growth across all 11 sectors as hopes for 2024 rate cuts emerged. The index is now just 1.9 per cent shy of its peak. Market enthusiasm persisted despite a more cautious stance on inflation revealed in the Reserve Bank’s December meeting minutes, leading to a reduction in rate cut expectations. Although the RBA maintained the cash rate at 4.35 per cent this month, the minutes hinted at a contemplation of rate hikes due to domestic demand surpassing levels aligned with the inflation target. On the ASX, energy shares climbed as crude oil hovered near a two-week peak due to increased attacks by Iranian-backed Houthi militants in the Red Sea, sparking concerns about potential disruptions in the fuel supply chain. Woodside Energy notably gained 1.7 per cent.

Rio Tinto closes at record highs

  • Mining companies experienced a surge on Tuesday, Rio Tinto notably closed at a historic peak of $134.24, while Fortescue Metals saw its shares inch towards a record despite softer iron ore prices in Singapore. Gold producer Ramelius Resources soared by 3.1 per cent, and lithium miner Liontown Resources surged by 11.6 per cent. In corporate updates, lithium explorer Azure Minerals saw a 1.7 per cent increase following an improved offer from Chilean giant Sociedad Química y Minera de Chile (SQM) and Hancock Prospecting, who raised their bid to acquire all of Azure’s shares for $3.70 each, up from $3.52. Meanwhile, shares in lithium company Allkem slipped by 0.6 per cent despite shareholder approval for its merger with Livent. Origin Energy stood out among top performers, concluding with a 3.2 per cent gain. It announced injecting an additional £280 million ($530 million) into British energy retailer and tech platform Octopus EnergyAGL Energy finished 0.6 per cent higher following plans to construct a 500MW battery plant at the company’s Hunter Energy Hub in NSW.

    US markets continue their ascent as investors price in rate cuts in 2024

    On Tuesday, U.S. stocks concluded the day on a positive note, as both the Dow Jones and Nasdaq extended their winning streak to nine consecutive days, while the S&P 500 finished just below its recent high. Investor optimism persists, welcoming the likelihood of Federal Reserve rate cuts in the coming year, coupled with the steady momentum of the economy. In company news, Boeing rose by 1.2 per cent after Lufthansa, the German airline, declared its purchase of 100 MAX jets. Additionally, Wall Street’s price targets for shares of the aerospace company continued to increase. FuelCell Energy declined by 4.6 per cent after reporting a 43 per cent decrease in fiscal fourth-quarter revenue compared to the previous year, falling short of Wall Street’s expectations. FuelCell Energy operates in the clean energy sector. UBS Group increased by 5.2 per cent following the disclosure that activist investor Cevian Capital acquired a 1.3 per cent stake in the Swiss banking giant. Cevian paid €1.2 billion ($1.31 billion) for the stake, citing substantial value potential in UBS after its acquisition of rival Credit Suisse.

    James Dunn

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

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