The ASX hit a new all time high above 8,500 points today on hopes of a near-term RBA rate cut and strong leads from the tech sector in the US overnight.
The benchmark index reached a peak of 8,515 points intraday with all 11 GICS sectors ending the session higher. Energy and Consumer Discretionary were the standouts, each gaining more than 1.1%.
The big four banks have all responded to yesterday’s lower-than-expected December quarter inflation report, forecasting a rate cut by the Reserve Bank in February.
Having brought forward its RBA rate rate forecast, National Australia Bank chief economist Alan Oster noted inflation had moderated faster than the RBA anticipated.
While Oster expects a gradual easing phase, NAB projects the cash rate will fall from 4.35% to 3.1% by February 2026.
Other major banks, including Westpac and UBS, made similar revisions to expect a February rate cut.
Commenting on today’s strong market performance, AMP head of investment strategy Shane Oliver said, “The strength (or record high if sustained) reflects optimism that rates will start to cut next month with three or four cuts this year, which will boost growth and hence profits, against a background of US shares also around record highs.
"It's a bit of a catchup to US shares which we lagged last year.
"And while DeepSeek has caused some angst around tech stocks, we don't have many, and in fact will benefit if DeepSeek and similar developments lead to cheaper AI," Oliver said.
DeepSeek shocked the US tech sector earlier this week, with the Chinese AI model said to be almost on par with America’s best despite not having access to the most advanced chips, and is much cheaper to run.
Yet Microsoft is confident that DeepSeek will not derail its US$80 billion investment in artificial intelligence this year, with chief executive Satya Nadella declaring the arrival of the Chinese model as “good news”.
“What’s happening with AI is no different than what was happening with the regular compute cycle. It’s always about bending the curve and then putting more points up the curve,” Nadella said.
Small cap movers
Lightning Minerals Ltd hit a daily high of $0.091, an increase of 21.34% on the previous close, Tryptamine Therapeutics Ltd was as much as 19.35% higher at $0.037, Yandal Resources Ltd rose 12.91% to $0.175 and QMines Ltd lifted by 10.71% to $0.062.
Other small cap positive moves were made by Solis Minerals Ltd, which was up to 9.38% higher at $0.07, Arovella Therapeutics Ltd reached $0.195, an increase of 5.41% and Empire Energy Group Ltd was up 5.26% to a daily high of $0.20.
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