ASX 200 gains 1.02% but finishes week lower
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The news: A global tech rally helped the Australian sharemarket lift on Friday in a tough week for equities, as weak economic data from China and Europe collided with a less dovish Fed to cool rapid rate cut hopes for 2024. The benchmark ASX 200 lifted 1.02% on Friday to close at 7,421.20, but was still down 1.03% for the week.
The numbers: ASX-listed IT stocks gained roughly 3%, after Taiwan Semiconductor Manufacturing (TSMC) soared 10% and 5% between its New York and Taipei listings, lighting a fire under tech stocks on Wall Street overnight. Healthcare stocks (+2.1%), financials (+1.1%) and energy stocks (+1.2%) also rallied.
The Australian dollar made gains for the second day in a row and is buying 65.8 US cents, after losing more than 1.6% against the greenback since this time last week. Financial markets have tempered their bets on US rate cuts, pricing in a 56% chance of a reduction in March, down from 70% a week ago.
The euphoria surrounding Bitcoin's ETF approval has also faded, the original cryptocurrency now trading at USD41,173 ($62,581) after spiking as high as USD49,000 last week. BTC is now staring down its lowest daily close in a month.
Oil prices rolled-off slightly after Thursday's rally as Middle East tensions, supply forecasts and weak expected demand from China continue to drive price volatility. Brent futures are trading at USD78.60 a barrel while West Texas Intermediate futures are at USD73.92 a barrel.
The context: Next week is a big one for monetary policy, with central banks in China, Europe, Japan and Canada to make their first policy rate calls for the year, although analysts are tipping holds across the board. In Australia, key data points will include NAB Business Confidence on Tuesday, S&P manufacturing and services PMI on Wednesday, and the RBA bulletin to round out the shortened week before the Australia Day holiday on Friday.
