Five at Five AU: ASX trades mostly flat, propped up by oil and gas stocks

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Phoebe is a financial journalist with a focus on human-interest and macro economic content, having covered the resources, biopharmaceutical, tech and blockchain market sectors since 2021. Phoebe graduated from the University of Wollongong with a double Bachelor of Journalism and International Studies, furnishing her with a wide skillset including but not limited to research, critical analysis, feature-writing, and both social and multimedia content creation. After... Read more

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Published: 06:10 18 Sep 2024 BST

The ASX is still showing signs of recovery, dipping just 5.9 points in trading today, after setting a new 100-day high yesterday and coming to rest at 8,135.00 points.

Strength in Energy and Utilities stocks was the main driver of progress today – Energy gained 0.64% and Utilities 1.58%, buoyed mostly by Origin Energy, which lifted 2.62% after a broker note from Macquarie upgraded the stock to an outperform rating.

Materials (-0.63%) and Health Care (-0.66%) undid those gains, cutting the market’s momentum as the other sectors remained flat.

Fortescue Ltd (ASX:FMG), BHP and Rio Tinto fell between 0.46% and 1.25%, while Resmed Inc (NYSE:RMD) fell 3.12% and Telix Pharmaceuticals was one of the worst performing stocks on the bourse, shedding 3.68%.

The other bottom-performer was HMC Capital Ltd, down 3.10%.

Overall, the market has gained 1.84% over the last five days and now sits 0.23% off its 52-week high.

“US markets touched new record all-time highs after seeing a better-than-expected retail sales number, before markets went back to ‘hold your breath and pause mode,’ ahead of the most important US Federal Reserve decision of the last two years,” writes moomoo market strategist Jessica Amir.

“Meanwhile, sophisticated investors and investment managers placed record wagers on the Fed to cut by half a percent.

“It’s now down to a coin toss for some, with markets suggesting there’s a 50% chance of a 0.5% Fed cut.

“This means traders are risking sharp losses if the US central bank opts for the status quo cut of 0.25%, which is largely expected.

“Gold moved higher after taking three giant steps forward and one step back, with the precious metal holding in brand new record high territory as investors expect higher gold prices after the Fed cuts.

“Oil moved back above US$71 a barrel for the first time in almost three weeks after rising 8% from its lows. Cash-strapped Aussies will be paying those higher prices in 2-6 weeks.

“Meanwhile, other commodities such as aluminium and copper are holding higher ground to the benefit of the Aussie share market and those holding commodity companies.

“That said, BHP listed in the US dipped lower overnight with traders locking in fresh profits.

“Investing focus for retailers will once again return to Bitcoin after its price climbed above US$60,000 ahead of the Fed decision, while Donald Trump unveiled his new crypto venture project, a digital currency platform.

“As for the Australian share market, after it closed at a brand new record all-time high yesterday of 8,141, the futures markets suggest Australia’s benchmark index, the ASX200, could see a touch of profit-taking at the open, with the futures suggesting a 0.3% dip in early trade.

“Markets are closed in Hong Kong and South Korea. But every man, woman, and their dog still awaits the Bank of Japan’s interest rate decisions, the Bank of England, and the Fed’s ahead of the RBA’s call next week.

“For the long-term investor in chips, tech, and AI and affiliated commodities, I think we need to remember that with the Fed’s cut, the elephant in the room is not how much they cut by.

“What is really key to financial markets and the economy is what rate cuts are on the runway ahead for the next year or so.”

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