ASX200 books new record high in fourth consecutive positive session, 11 industry sectors end in the green

The sharemarket’s rate cut rally extended for a fourth session on Tuesday, with the local bourse notching another record closing high as investors firm on a “jumbo” 50 basis point cut from the US Federal Reserve.

The benchmark ASX200 climbed another 19.3 points, or 0.24 per cent, to close at 8140.9 points, while the broader All Ordinaries index lifted 20.1 points, or 0.24 per cent, to settle at 8361.2.

Tech stocks jumped 0.78 per cent to 3385.9.

The benchmark briefly broke through the 8150 barrier in intraday trading to supersede its previous high of 8148.7.

The rally was broadbased, with all 11 industry sectors ending in the green.

The rate-sensitive information technology and real estate sectors propelled the session, rising 1.07 per cent and 0.71 per cent, respectively.

Tech darling Xero advanced 2.56 per cent to $148.10 a share after announcing its acquisition of Syft Analytics for US$70m.

Real estate titan Goodman Group rose 0.81 per cent to $35.92 while Mirvac jumped 1.33 per cent to $2.28.

The energy sector gained 0.2 per cent after crude oil prices rose 2.1 per cent overnight to hit $70.09 a barrel.

Oil is rallying on supply disruptions from Hurricane Francine in The Gulf of Mexico and expectations of an aggressive Fed rate cut.

Woodside Energy edged up 0.12 per cent to $24.13 while Santos lifted 0.29 per cent to $7.02.

A reassessment of the size of Thursday’s widely anticipated rate cut in the world’s largest economy has triggered the upward march, with the rates market now pricing in a 67 per cent chance of a 50bp cut.

But soft economic data from China could be acting as a dampener on the rally, IG markets analyst Tony Sycamore said.

“For a second session in a row, the ASX200 started the session with robust gains before falling away from its 8148-record high,” he said.

“The culprit behind yesterday’s lack of upside conviction (was) three high-profile US banks lowering their Chinese GDP forecasts for 2024 following the release of disappointing Chinese economic data over the weekend.

“While the news took the lowering of China’s growth forecasts did take the wind out of the buyer’s sails, its impact was far less than might have been expected.”

Mr Sycamore warned of “market disappointment” if the Fed opts for a more conservative 25bp move.

Tiger Brokers Australia vice president Jack Liang also warned of volatility ahead for investors.

“While rate cuts are designed to encourage spending, they can also lead to asset bubbles and increased levels of debt, both in the corporate and household sectors,” he said.

“Tiger Brokers advises our clients to remain vigilant and adopt a diversified investment strategy to hedge against potential market volatility, ensuring they are positioned to take advantage of growth opportunities while mitigating risk.

“Considering the US election is upcoming in the next few months, risk mitigation is also important as hunting for potential rewards.”

The big miners were mixed as iron ore rallied 1.5 per cent to hit $92.60 a tonne.

BHP traded flat to settle at $39.55, while Rio Tinto slipped 0.05 per cent to $110.75 and Fortescue advanced 1.75 per cent to $17.49.

The big banks all inched higher, with Commonwealth Bank edging up 0.04 per cent to $143.04, NAB gaining 0.21 per cent to $38.86, Westpac climbing 0.73 per cent to $33.03 and ANZ rising 0.03 per cent to $31.21.

In corporate news, New Hope Group CEO Rob Bishop said the coal miner would bid for Anglo American’s coking coal assets in Central Queensland.

The miner also reported a 56 per cent decline in full year profits to $475.9m.

Shares in the company lifted 1.65 per cent to $4.32.

Australia and the United Arab Emirates inked a new free trade deal, which will eliminate tariffs on more than 99 per cent of all Australian products entering the UAE.

“This is a very good deal for Australian farmers and producers, including beef and sheep producers, with estimated tariff savings of $50m each year for our food and agricultural exports alone,” Trade Minister Don Farrell said.

He also said the deal would open up investment from the UAE’s US$1.7t sovereign wealth fund in Australia’s critical minerals sector.

The top gainer on the ASX200 was Polynovo Limited, which leapt 6.53 per cent to $2.61.

The largest laggard was Liontown Resources, which slumped nearly 3 per cent to 65c.

The Aussie dollar gained 0.06 per cent to buy US67.5c at the closing bell.