ASX shares open higher, Droneshield leads gains as healthcare rebounds
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More news: Australian shares opened higher as healthcare stocks rebounded after companies such as CSL, Telix Pharmaceuticals and Pro Medicus said that US President Donald Trump’s 100% tariff on pharmaceuticals would have little to no effect.
The benchmark S&P/ASX 200 index was up 77.1 points to 8,865 at 10:54am AEST, with nine of the 11 sectoral indices in positive territory.
The healthcare sector (+2.1%) was leading gains as CSL (+2.3%), Pro Medicus (+0.9%), Resmed (+1.5%), Fisher & Paykel Healthcare (+1.6%) and Telix Pharmaceuticals (+2%) saw their share price lift.
On Friday, a spokesperson for CSL said the tariffs were expected to have no material impact on the blood products company while a Telix Pharmaceuticals spokesperson said their manufacturing operations were in the US.
Pro Medicus told the exchange on Monday that it is a “provider of software to the global diagnostic imaging market” so is not subject to US tariffs on pharmaceuticals.
Droneshield (+9.8%) was leading gains on the ASX 200. On Friday, Bloomberg reported that the stock was the best performing defence stock in Asia. Droneshield's share price has gained around 448% in the year to date.
Australian shares to rise after Wall Street regained ground
The news: Australian shares are set to lift ahead of the release of the federal government’s Final Budget Outcome, which will detail a budget deficit that is two-thirds smaller than initially forecast for 2024-25, and after Wall Street finished higher on Friday after key inflation data was in line with expectations.
The numbers: Updated at 7:30am AEST:
- ASX futures: up 21 points to 8,825
- Wall Street: Dow Jones up 0.65%, S&P 500 up 0.59% and Nasdaq up 0.44%
- Europe: CAC 40 up 0.97%, DAX up 0.87% and FTSE 100 up 0.77%
- Spot gold: up 0.28% to USD3,760 per ounce
- Oil prices: Brent up 1.02% at USD70.13/bbl and US WTI up 1.14% to USD65.72/bbl
- AUD: up 0.15% to 65.52 US cents
- Bitcoin: up 1.21% to USD110,769
The context: On Monday, Treasurer Jim Chalmers will release the Final Budget Outcome for 2024-25, which will detail a lower than expected budget deficit of $10 billion due to higher than expected tax collected from workers and businesses. The deficit was initially forecast to be $27.9 billion.
All three major Wall Street indices gained on Friday, with the S&P 500 snapping a three-day losing streak and remaining on track to end the third quarter higher. The Dow Jones and Nasdaq also posted gains after taking losses in the three preceding days.
The result followed the release of core personal consumption expenditure (PCE) data that was in line with expectations, with consumer spending rising for the third month in a row in August.
As expected, the month-to-month increase in the PCE price index came in at 0.3% and the month-to-month increase in the core PCE price index came in at 0.2%. Similarly, the year-to-year PCE gain of 2.7% and the core PCE gain of 2.9% were in line with expectations.
