ASX jumps as Fed sparks Wall Street rally; Banks, tech stocks gain

The Australian sharemarket kicked off Thursday’s session with strong gains after a rally on Wall Street as Federal Reserve chair Jerome Powell calmed tariff-wary investors, signalling the US central bank saw no need for drastic action in the face of Donald Trump’s trade war.

The S&P/ASX 200 jumped 63.6 points, or 0.8 per cent, to 7891.90 as of 10.58am AEDT, with all 11 industry sectors advancing except for materials. Consumer discretionary stocks, real estate investment trusts, tech firms and financial stocks posted the biggest advance. It was a welcome shift in mood after the ASX resumed its slide from last week on Wednesday, falling 0.4 per cent.

The Australian dollar traded unchanged at 63.57 US cents.

Retailers and banks helped lead the market higher as investor fears about the strength of the global economy subsided following the measured tone struck by Powell, who called the potential for the impact of tariffs on inflation “transitory.”

The big four banks all advanced, with CBA – Australia’s largest lender and also the biggest stock on the ASX – climbing 1.3 per cent. Westpac rose 1.6 per cent, NAB added 1 per cent and ANZ gained 1.6 per cent. In retail land, Officeworks, Bunnings and Kmart owner Wesfarmers edged up 0.2 per cent, while pokies maker Aristocrat jumped 2.3 per cent and electronics retailer JB Hi-Fi gained 2 per cent.

Real estate investment trusts tracked property stocks in the US, which saw a boost from lower Treasury yields in the bond market. When bonds are paying investors less in interest, they can encourage investors to pay higher prices for stocks. Data centre and warehouse owner Goodman Group rose 1.4 per cent and shopping centre owners Scentre, Stockland and Vicinity were up 1.9 per cent, 1 per cent and 1.4 per cent, respectively.

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Tech stocks also rode on the coattails of their American peers. Embattled tech concern WiseTech Global quickly recovered from its 2.3 per cent fall on Wednesday, when its board said it was misled by executive chairman Richard White, but his job was secure. The stock gained 2.5 per cent in early trading. Software firms Xero and Technology One were up 1.9 per cent and 2.4 per cent, respectively, while family member tracking app Life360 jumped 5.4 per cent.

The only sector struggling in early trade were materials, with the mining heavyweights BHP (down 0.6 per cent), Fortescue Metals (down 1.8 per cent) and Rio Tinto (down 0.3 per cent) all declining after iron ore prices fell overnight. Home sidings maker James Hardie, which makes most of its profits in the US, dropped 2 per cent.