ASX200 futures were up 53 points (+0.63%) as of 8:30 am AEDT, signalling a positive start for the local market.
Yesterday, the ASX200 finished 5 points (-0.06%) lower at 8,374. The Real Estate (-1.11%), Consumer Discretionary (-0.76%) and Energy (-0.73%) dragged. The IT (+1.52%), Materials (+0.93%) and Health Care (+0.01%) sectors outperformed.
After gaining 7.13% in January, the Consumer Discretionary sector extended its pullback yesterday. Kogan led the declines, falling 2.81% to A$4.49, while Aristocrat Leisure slipped 1.3% to A$73.10 and Myer dropped 1.12% to A$0.89.
In the interest rate market, traders priced in 85 basis points of Reserve Bank of Australia (RBA) rate cuts for the year, with a 25-basis-point reduction in February now nearly fully priced.
“A standout earnings report from US tech company Palantir after Wall Street closed yesterday, which saw its stock soar 22.75% in after-hours trading to $102.79, boosted local tech stocks,” IG Markets analyst Tony Sycamore said.
“Appen surged 9.77% to $2.81, Wisetech Global rose 3.60% to $124.50 and DroneShield climbed 3.25% to $0.63. ZIP also recovered a good chunk of its losses from the previous day, closing 2.19% higher at $2.33."
US stock momentum
Overnight, US stocks gained momentum, closing at their session highs and nearly erasing losses for the week. Investors responded to a mix of economic data and corporate updates, with equities finding support as risk sentiment improved.
“Starting with the simmering trade war, after some initial headline shock yesterday afternoon, the details of China’s rapid response to US tariffs were found to be modest, bringing relief to risk assets,” Sycamore noted.
“The range of US goods targeted under China’s retaliatory tariffs included oil and coal as well as restrictions on strategic materials, including tellurium and tungsten. The amount totals just $20 billion of annual imports compared with the $450 billion worth of new US tariffs on Chinese goods."
Palantir shares soared 24% to US$103.83 after the company exceeded forecasts and issued an optimistic outlook. Meanwhile, Alphabet shares dropped 7.47% to US$192.47 in after-hours trading following weaker-than-expected earnings and a forecasted 42% increase in capital expenditure to US$75 billion for 2025.
The US fourth-quarter earnings season continues, with key results expected in the next 24 hours from Uber, Walt Disney, MicroStrategy, Ford and Arm.
European markets
Automobiles rose 2.1%, driven by an 8% surge in Ferrari shares after the luxury carmaker projected at least a 5% increase in revenue and core earnings for the year.
Meanwhile, financial services stocks fell 1.1%, weighed down by a 7% drop in UBS Group after chief executive officer Sergio Ermotti warned that higher capital requirements in Switzerland would impact shareholder returns.
The continent-wide FTSEurofirst 300 index edged up 0.2%, while the UK FTSE 100 index slipped 0.2% in London.
Currencies and commodities
Currencies
Currencies strengthened against the US dollar in European and US trade.
- The euro climbed from US$1.0273 to US$1.0386 and remained near US$1.0380 at the US close.
- The Australian dollar advanced from US$0.6168 to US$0.6260, settling near US$0.6255.
- The Japanese yen firmed from JPY155.48 per US dollar to JPY154.16, trading around JPY154.30 by the US close.
Commodities
The broader resource sector had a strong session, with gains across copper, lithium and uranium stocks, reflecting sustained interest in commodities.
Global oil prices diverged as US-China tariff tensions escalated and the US reinstated its "maximum pressure" campaign on Iran, aiming to curb Iranian oil exports.
- Brent crude rose by US$0.24, or 0.3%, to US$76.20 per barrel.
- The US Nymex crude declined by US$0.46, or 0.6%, to US$72.70 per barrel.
Base metal prices rose as the US dollar weakened following new US tariffs on Chinese goods and Beijing’s retaliatory measures.
- Copper futures gained 1.1%, and aluminium added 0.5%.
- Gold futures climbed US$18.70, or 0.7%, to US$2,875.80 an ounce, as investors turned to the safe-haven asset amid rising trade tensions. Spot gold reached a record high of US$2,845.14 before closing near US$2,842.
- Iron ore futures increased by US$0.38, or 0.4%, to US$105.40 per tonne, ahead of China’s market reopening on Wednesday following the Lunar New Year holiday.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) finished 0.32% higher yesterday to 3,170.60. Over the last five days, the index is 0.27% lower.
It has been a slow start to the week overall, however, you can read about the following and more throughout the day.
- Cyprium Metals Ltd has upgraded its mineral resource estimate for its 100%-owned Maroochydore Copper-Cobalt Project in WA. The company reported Inferred resources of 370.8 million tonnes at 0.43% copper and 227 ppm cobalt for 1.595 million tonnes of contained copper and 84,000 tonnes of contained cobalt at 0.25% copper cut-off grade. We’ll speak with executive chair Matt Fifield later today about the significance of this upgrade.
- Dynamic Metals Ltd has provided an update on gold exploration activities at the Cognac West prospect, part of the Widgiemooltha Project in Western Australia, where the company has applied its systematic and methodical exploration approach to generate drill targets.
- Brightstar Resources Ltd announced results from diamond drilling completed at the Lord Byron deposit, part of the 293,000-ounce Jasper Hills Gold Project located in Brightstar’s Laverton Hub. The program was designed to infill deeper zones of the deposit and increase confidence in the geological interpretation prior to a planned update to the mineral resource estimate.
- Apollo Minerals Ltd has started Phase 2 drilling at its Salanie Gold Project in Gabon, following exceptional results from the 2024 drill program. Drilling results from 2024 include 11.7 metres at 4.3 g/t gold from 9.6 metres and visible gold in quartz veining with assays up to 124 g/t, confirming the untapped potential for a high-grade gold system, within the 12-kilometre prospective greenstone belt.