ASX200 cracks 8000 barrier in historic trading day

The Australian sharemarket cracked the 8000 barrier in a fresh record on Monday as investors swell with confidence ahead of impending US Federal Reserve rate cuts.

The benchmark ASX200 jumped 58.3 points, or 0.73 per cent, to break through the historic threshold and close at 8017.6 points.

The broader All Ordinaries index rose 56.3 points, or 0.69 per cent, to settle at 8262.4.

Tech stocks lifted 1.36 per cent to 3165.

The rally was broadbased, with all 11 industry sectors ending in the green, led by information technology stocks with a 1.39 per cent upswing and discretionary with a 1.37 per cent gain.

Retail conglomerate Wesfarmers jumped 2.1 per cent to $70 a share while Harvey Norman lifted 1.35 per cent to $4.51.

Monday’s advance followed a surge on Friday that saw the benchmark notch a record close of 7959.3 points for a weekly gain of 1.8 per cent.

An expectation of imminent rate cuts from the US Fed is propelling the rally, with investors now almost certain a cut will come in September.

A rate cut in the world’s largest economy would serve as a new tailwind for equities across the globe.

Betashares Chief Economist David Bassanese said the local market could also benefit from a rotation out of mega-cap US tech stocks.

“Being relatively cheap and unloved, the Australian market could become part of the ‘great rotation’ if global investors start to seek opportunities outside of US large cap technology stocks such as Nvidia,” he said.

The ASX rally comes despite some troubling data sweeping over the Australian economy.

“Both business and consumer confidence weakened in key reports last week, suggesting the economy continues to slowly but surely buckle under the lagged impact of past RBA policy tightening,” Mr Bassanese cautioned.

“Consumer confidence was hurt by increased talk of rate hikes, while households had yet to see the end-month tax cuts affect their pay packets

“We can only hope and pray the June quarter CPI in two and a half weeks time is benign.

“That said, given increased signs of reduced inflation pressure in the US and US rate cuts likely fairly soon, there’s still a chance the RBA could hold off hiking rates in August even if the CPI is again a bit higher than expected.”

The big banks continued their march upwards, led by new market kingpin Commonwealth Bank, which climbed 0.78 per cent to settle at a new record high of $132.69 a share.

Westpac gained 0.75 per cent to $28.11, ANZ lifted 0.78 per cent to $29.83 and NAB added 0.81 per cent per cent to $37.25.

The big miners recorded a mixed session, with BHP and Fortescue lifting 0.62 per cent to $43.67 and 1.72 per cent to $22.48, respectively, while Rio Tinto and South32 both traded flat, closing at $119.84 and $3.62, respectively.

In corporate news, embattled casino giant Star Entertainment tumbled 1 per cent to 50c after announcing a shut down of its electronic gaming machines on “system performance issues”.

“The Star is working closely with its external provider Konami to address the operational issues as soon as possible and will provide an update once operations return to normal,” the $1.45bn company said.

“Treasury Brisbane, The Star Gold Coast and The Star Sydney remain open with table games, restaurants, bars and entertainment available.”

Star did not offer a timeline for when the machines would be turned back on.

The top gainer on the ASX200 was healthcare company Nanosonics, which leapt 5 per cent to $3.31 after delivering a trading update for the second half of FY24.

The company expects to post H2 revenues of $90.4m, a 14 per cent increase from H1, and full-year revenues of $170m.

The largest laggard was Lifestyle Communities, which crashed 18 per cent to $10.30 after a news report presented some critical views of the company’s operations.

The Aussie dollar lost 0.07 per cent to buy US67.7c at the closing bell.