TACO trade sends ASX, gold to record high, investors call Trump’s bluff
Australia’s benchmark S&P/ASX 200 share index headed for its fourth straight day of gains in rising 0.7 per cent to a record intraday high of 9059 points on Thursday lunchtime, as investors shrugged off escalating trade tensions between the US and China.
Geopolitical risk bellwether gold also hit a record high of $US4,227 ($6,514) as whipsawed investors also piled into government bonds to shelter from the White House’s chaotic policies.
In the share market gains among the banks, miners, and data centre businesses linked to artificial intelligence did much of the heavy-lifting.
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By continuing you agree to our Terms and Privacy Policy.Shares’ rise gathered steam on Thursday after data showed the jobless rate rose to 4.5 per cent in August, ahead of expectations at 4.3 per cent to prompt investors to lift the chances of an interest rate cut from the Reserve Bank on Melbourne Cup Day.
“Today’s (jobs) print bolsters the case for an RBA cut in November (our central case), but whether it does will depend on if the Q3 CPI (September quarter inflation data) is low enough on 29 October,” said HSBC’s Australian economics team.
Damien Klassen the founder and Chief Investment Officer of Nucleus Wealth said the record high shows that for share market investors bad news in terms of poor jobs numbers is not a reason to sell.
“In Australia it’s almost like bad news is good news as people think interest rates will go down,” said Mr Klassen. “But I think Australian shares are too expensive as a general rule, except for the resources side, although we’re not priced for a scare in Chinese growth”
Market movers
Homegrown investment bank Macquarie revealed a $60 billion deal to sell its US Aligned Data Centre assets to a Nvidia-backed group for $61 billion.
The bank added 5 per cent to $228.10 on the news, while the market’s most valuable company Commonwealth Bank rose 1.4 per cent to $168.62.
“Data centres we’re happy to be exposed to the higher end of that as long as their cash producing, but some of the other stuff to be built is clearly more speculative,” said Mr Klassen.
The market’s top performer on Thursday was bank, financial advice business and asset manager AMP. It added 9 per cent to $1.93 per share after flagging strong inflows into its platforms business.
Elsewhere, gold giants like Newmont and Northern Star dominated the ASX leaderboard again, with respective gains of 4 per cent and 1.9 per cent.
