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The ASX200 index edged higher in Monday trading as strong consumer stocks offset a sell-off in the energy sector.
Gold prices also rose after China’s central bank resumed buying gold after a six-month pause.
The ASX200 index closed up 0.03% at 8423 points, following Wednesday’s record high. Eight of the 11 sectors closed in positive territory.
The energy sector fell 1 percent, with only two of the exchange’s top 10 companies closing in positive territory.
Discretionary assets rose 0.64 percent, with the telecommunications and health care sectors each rising about a third of a percentage point.
christmas shopping drove consumer stocks to be the best performing sector on Monday. Image source: iStock
Morgan Stanley recommended that buyers snap up the Australian dollar and dump the U.S dollar on fears the Federal Reserve will cut interest rates more than expected, while the firm said concerns about Trump’s tariffs were overblown.
Morgan Stanley’s guidance contradicts warnings from Commonwealth Bank and National Australia Bank, which have warned the Australian dollar could fall below 60 cents next year.
“The dollar and gold typically have an inverse relationship, as a stronger dollar makes gold more expensive for non-U.S consumers and investors,” said Vivek Dhar, head of mining commodities research at Commonwealth Bank.
US giant Morgan Stanley has told investors that concerns about Donald Trump’s proposed tariffs are overblown. Photo: Allison Robbert / AFP
Australia’s largest bank recently changed its forecast for the dollar from an 8% decline by the end of next year to a peak gain of 4% in the third quarter, largely due to President Trump’s proposed tariffs.
But it was other heavyweight economies that hit Australian markets on Monday.
Oil prices fell for a second week in a row and Saudi Arabia cut its oil prices to Asia by more than expected, raising concerns about OPEC output, sending shares of Woodside (down 1.1%) and Santos (down 0.7%) lower).
The fall of the Syrian regime will also have an impact on the oil market. Ampol was one of the biggest decliners among the major oil companies, falling 1.9.
Iron ore prices in Singapore fell more than 1%. Fortescue shares also fell 1.2.
concerns about pipelines and fallout from the Syrian crisis have shaken oil markets. Image credit: iStock
In the financial sector, Platinum Asset Management, an Australia-based multinational, fell 14.3% to A$0.89 as potential acquirer Regal Partners pulled out.
Woolworths shares rose $1.33 after revealing a strike by warehouse workers had cost it at least $140 million in lost sales, almost three times more than expected.
The rise in discretionary assets was driven by Breville, up 2.9 per cent, and Aristocrat Leisure, up 1.9 per cent. Wesframers and JB Hi-Fi rose 0.7 per cent and 0.4 per cent respectively.
The telecommunications sector also performed strongly, with listed broadband provider Superloop announcing it would acquire Optus subsidiary Uecomm for $17.5 million, purchasing more than 2000km of high-capacity fibre optic cable.
Superloop’s network covers Sydney, Melbourne, Brisbane and the Gold Coast, and the company has acquired more than 1,900 buildings and about 50 data centers. Superloop shares rose 1.7% to A$2.30.
Australia’s energy sector’s biggest companies posted losses on Monday. Image: NewsWire/Max Mason-Hubers
In Queensland, the new government issued a head card and a six to the Star Casino; the suspension of the licence of The Star Gold Coast was postponed from December to March 31, and the appointment of a special manager was extended to June 30.
Star Media’s shares hit an all-time low before lunch, before rising slightly to close 2.5% lower.
On Wall Street, the S&P 500 rose 0.2%, hitting an all-time high a week ago. The Nasdaq rose 0.8%, hitting a record high, while the Dow fell 0.3.
The Reserve Bank of Australia (RBA) board will hold its last meeting of the year on Tuesday, with the Australian Stock Exchange (ASX) pricing in a 91.1% chance that the central bank will keep the cash rate at 4.35.