ASX revisits record as CBA shares fly; Tech companies slip

The Star Entertainment Group (up 6.3 per cent) was one of the best-performing stocks on the index, despite the embattled casino operator fronting court to determine whether their previous board should have known earlier about the scandals that have torched more than $4 billion worth of shareholder funds.

The best-performing sector was industrials, buoyed by stock transfer company Computershare, which rallied 15.5 per cent after it reported higher revenue growth in its half-year results.

The laggards

The miners had a tough session, with the sector closing down 0.4 per cent. BHP pared back early losses to trade flat (up 0.05 per cent) at close.

The miner told the market at close that it had appointed former NAB chief executive Ross McEwan to take over from Ken MacKenzie as chair of its board. McEwan ran NAB for five years and was chief executive of the Royal Bank of Scotland from 2013 to 2019 before that.

Meanwhile, Rio Tinto (down 0.6 per cent), James Hardie Industries (down 1.2 per cent), and gold miner Northern Star (down 1.3 per cent) all slipped in the session.

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Investors by and large switched to defensive stocks on Wednesday in a search for safe haven investments after Trump’s latest escalation to place a 25 per cent tariff on all steel and aluminium imports.

Automotive parts supplier Amotiv finished at the bottom of the index after reporting lagging growth in its interim financial results, shedding 7 per cent.

However, information technology was the worst-performing sector, dropping 1.1 per cent, dragged down by losses for accounting software company Xero (down 1.6 per cent), while NextDC (down 2.4 per cent) and TechnologyOne (down 1.8 per cent) also slipped.

The lowdown

Jun Bei Liu, portfolio manager at Tribeca Alpha Plus Fund, said the Australian sharemarket’s performance on Wednesday had been bolstered by CBA’s “incredibly strong results”.

“It [CBA] has beaten analyst expectations, not by much, but by 1 per cent still. It has shown very strong net interest margin expansions.”

However, she said although CBA share prices rose, the company was also overvalued.

“The CBA is incredibly expensive – it is a very high-quality bank, but it is probably the most expensive bank in the world,” Liu said. “It’s more expensive than J.P. Morgan and other global banks where their earnings are growing enormously, but CBA earnings aren’t growing as much, it has just been very defensive.”

In the US on Tuesday, the S&P 500 closed virtually unchanged in the market’s first trading since Trump announced 25 per cent tariffs on all foreign steel and aluminium coming into the US. The Dow Jones edged up by 0.3 per cent, and the Nasdaq composite was 0.4 per cent lower.

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The moves were modest not only in the US stock market but also in the bond market, where US Treasury yields rose by only a bit. The threat of a possible trade war with substantial and sustained tariffs would push up prices for US households and ultimately lead to big pain for financial markets.

But Trump has shown he can be quick to pull back on such threats, like he did with 25 per cent tariffs he had announced for all imports from Canada and Mexico, suggesting they may be merely a negotiating chip rather than a true long-term policy.

Trump signalled to Prime Minister Anthony Albanese on Tuesday that he was considering an exemption of the new steel and aluminium tariffs for Australia. However, his top trade adviser, Peter Navarro, subsequently said Australia was “killing” the US aluminium market, clouding Canberra’s hopes.

The Fed had cut its main interest rate sharply through the end of last year, hoping to give a boost to the job market and the overall economy. Just a day ahead of a key inflation reading, Powell has again reiterated that the US central bank is in no hurry to cut interest rates any further. Worries about inflation potentially staying stubbornly high have helped force the Fed and traders alike to cut back expectations for how many cuts to rates may arrive in 2025.

Tweet of the day

Quote of the day

“Donald Trump and his advisers have selective memories, choosing the lessons from history that suit Trump’s protectionist convictions while ignoring those that don’t. The tariffs on imports of steel and aluminium to the US are broadly a reprise of what Trump did in 2018, when he slapped a 25 per cent tariff on steel imports and a 10 per cent rate on imported aluminium.”

That’s Stephen Bartholomeusz on Trump’s latest tariff escalation and how it could drum up fears of a potential global trade war. Read more of his piece here.

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With AP, Bloomberg