The Australian sharemarket is expected to open higher on Wednesday, with futures at 6.01am AEST pointing to a gain of 35 points, or 0.4%, as easing oil prices and record closes on Wall Street support investor sentiment.
Investors will also be watching results from Pinnacle Investment Management, Argo Investments and Light & Wonder.
ASX surges towards record territory
The S&P/ASX 200 jumped 126.5 points, or 1.4%, to 9,145.8 on Tuesday, leaving the benchmark within reach of its March record of 9,200.9.
The rally followed a 0.5% gain on Monday after US President Donald Trump held off on further strikes against Iran, easing concerns about an escalation in the Middle East.
Technology stocks led the advance after strong gains among US megacaps.
WiseTech Global rose 3.1%, Xero added 3.5% and TechnologyOne climbed 3.4%. Life360 surged 11.4%, Megaport jumped 5.7% and AI data centre operator NextDC gained 4.2%.
The major banks also contributed strongly. Commonwealth Bank rose 1.6%, Westpac gained 1.7%, National Australia Bank advanced 3% and ANZ added 2.4%.
Materials stocks recovered from early weakness linked to falling iron ore prices and concerns surrounding physical commodities trader Radiant World.
Rio Tinto finished 1.7% higher and Fortescue gained 1.6%, while BHP slipped 0.3% amid concerns about potential strike action at its Port Hedland operations.
Gold miners also advanced as bullion remained above US$4,000 an ounce. Northern Star and Newmont each rose 2.1%, Evolution Mining gained 1.8% and Lynas Rare Earths rallied 6.6%.
Real estate and healthcare stocks were also stronger. Goodman Group (ASX:GMG) gained 1.1%, Scentre Group rose 1.5% and Vicinity Centres added 2.3%. CSL jumped 3.6% and ResMed advanced 1.5%.
The energy sector closed 0.7% higher. Woodside Energy rose 1.4% and Santos gained 0.9%, although Ampol and Viva Energy fell 2.9% and 3.6%, respectively.
Qantas slipped 0.3% after confirming it was considering outsourcing as many as 1,000 marketing, finance, human resources and other back-office roles to India as part of an agreement with Accenture focused on artificial intelligence.
Wall Street reaches fresh records
The S&P 500 and Dow Jones closed at record highs as strong forecasts from Caterpillar and Palantir Technologies reinforced confidence in demand linked to artificial intelligence.
Palantir surged 29% after lifting its annual revenue forecast, while Caterpillar gained 5.5% after upgrading its revenue growth outlook amid strong demand for equipment used in AI data centre construction and power generation.
Semiconductor stocks rallied sharply, lifting the Philadelphia Semiconductor Index by 6.6%.
Microsoft gained 1%, while Amazon fell 2.3% as it cooled from a recent rally that had pushed its market value above US$3 trillion.
The broader US technology sector advanced 4.1%.
The Dow Jones gained 1.7%, the S&P 500 rose 1.8% and the Nasdaq climbed 2.6%.
US Treasury yields fell as lower oil prices reduced inflation concerns and prompted traders to scale back expectations of a Federal Reserve interest rate increase in September.
The US 10-year Treasury yield fell seven basis points to 4.62%, while the two-year yield dropped six basis points to 4.19%.
Investors will turn their attention to earnings reports from Eli Lilly, SanDisk, Western Digital, Walt Disney, Shopify, News Corp (NASDAQ:NWSA) and Uber.
US economic releases include ADP employment figures and the Institute for Supply Management’s services purchasing managers index.
European shares close at record high
European markets also advanced, supported by technology stocks, company earnings and falling oil prices.
The continent-wide FTSEurofirst 300 index gained 0.8% to close at a record high, while the UK’s FTSE 100 rose 0.2%.
Technology stocks climbed 2.8%, led by BE Semiconductor, which surged 8.1% following a broker upgrade.
Soitec jumped 9.9%, while Aixtron, ASML and Infineon gained between 2.6% and 3.7%.
Bayer rose 2.4% after the German pharmaceutical company reported an unexpected 1.9% increase in quarterly operating profit.
HSBC slipped 0.8%, despite reporting a better-than-expected first-half profit and raising its net interest income target.
Australian dollar strengthens
Major currencies were mixed against the US dollar.
- The Australian dollar gained 0.6% to US70.44 cents.
- The euro rose 0.2% to US$1.1530.
- The Japanese yen weakened 0.3% to ¥157.75 per US dollar.
Oil falls to three-week low
Global oil prices fell sharply after comments from US and Qatari officials raised hopes of a diplomatic resolution to the Iran conflict and improved flows through the Strait of Hormuz.
- Brent crude futures settled 5.3% lower at a three-week low of US$79.36 a barrel.
Base metals were mixed.
- Copper futures rose 1.6% to their highest level in more than two months as inventories outside the US continued to decline.
- Aluminium futures fell 0.7% after major producers reported strong increases in output.
- Gold futures gained 1.5% to settle at US$4,153 an ounce as lower oil prices eased inflation concerns and reduced expectations of higher US interest rates.
- Iron ore futures were unchanged at US$93.70 a tonne.