ASX rallies to record as Woolies, WiseTech surge, BHP hits all-time high

Australia’s sharemarket gained more than $30 billion in value to close at a record high on Wednesday, as a flurry of corporate news buoyed sentiment and stocks tracked gains on Wall Street, where investors pivoted back from artificial-intelligence weariness to focus on the upsides of AI.

Woolworths, the nation’s biggest supermarket chain, had its best day ever with a 13 per cent share surge after delivering a result that showed it had its mojo back after a period of underwhelming results. Software giant WiseTech Global jumped 11 per cent after saying it will slash almost a third of its staff as it turns to AI for its product development. And Fortescue Metals paced gains in mining stocks after reporting record iron ore shipments.

The S&P/ASX 200 rallied 106 points, or 1.2 per cent, to a record close of 9128.30, with a more than 5 per cent surge in consumer staples and tech stocks leading the gains. The Australian dollar was trading 0.7 per cent higher at US71.07¢ by late afternoon after figures showed inflation came in stronger than expected in January, boosting bets on further rate rises by the Reserve Bank.

In all the AI and earnings excitement, shareholders seemed to shrug off the latest inflation data. The Australian Bureau of Statistics said the closely watched trimmed mean gauge of consumer prices rose 3.4 per cent last month from a year earlier, exceeding economists’ estimate of 3.3 per cent and holding above the RBA’s 2-3 per cent target band for a seventh straight month.

“The picture is of an economy that needs more restrictive policy to come back to balance,” Barrenjoey’s chief economist Jo Masters wrote in a note to clients.

Unfazed by the prospect of rising rates, Woolworths soared to $35.62, the highest valuation since August 2024, after its half-year results. Sales lifted 3.4 per cent to $37.1 billion, helping it push operating earnings up 14.4 per cent to $1.66 billion. Australian food sales from its supermarkets gained 3.6 per cent to $1.5 billion. The company announced a fully franked interim dividend of 45¢ per share.

The result was “well ahead of expectations” thanks to cost cuts and improving profit margins, Jarden analysts noted.

WiseTech shares jumped 11.1 per cent after the logistics software maker said it would cut roughly 2000 staff over the next two years as chief executive Zubin Appoo bets the company’s future on artificial intelligence. The restructure comes amid a steep sell-off across traditional software makers from Atlassian to Adobe, driven by fears that AI-powered coding tools would allow upstarts to rapidly replicate services that took incumbents years to build.

“The era of manually writing code as the core act of engineering is over,” Appoo declared, calling AI “the most significant shift in decades” for software development.

Other tech stocks also advanced, tracking their peers’ gains in the US, with accounting software maker Xero up 5.5 per cent, AI data centre operator Next DC rising 5.4 per cent and family tracking app Life360 gaining 6 per cent.

In the mining sector, Fortescue shares jumped 4.7 per cent after the iron ore miner said shipments of the key steelmaking ingredient reached a record 100.2 million tonnes in the December half. The company reported a net profit of $US1.9 billion ($2.7 billion) and declared a fully franked interim dividend of 62¢ per share, 24 per cent higher than the previous year.

Fortescue Metals boss Dino Otranto said the company’s decarbonisation push was lowering its operating costs. “The more diesel we eliminate, the less exposure we have to price volatility, and the stronger and more predictable our margins become,” he said.

Other miners also advanced. BHP gained 3.2 per cent, hitting a fresh all-time high of $56.51. Rio Tinto added 2.1 per cent and gold miners Northern Star Resources and Evolution Mining gained 2.1 per cent and 3.3 per cent, respectively.

Shares in gaming giant Tabcorp soared 23.5 per cent to a high of $1.05, after it reported underlying earnings rose 19 per cent to $110 million in the December half. Cost cuts boosted its bottom line despite revenue increasing only slightly to $1.34 billion.

On Wall Street, the S&P 500 climbed 0.8 per cent overnight and recovered nearly three-quarters of its sharp drop from the day before. The Dow Jones added 0.8 per cent, and the Nasdaq composite gained 1 per cent.

The gains came after investors piled back into AI-related stocks ahead of Nvidia’s results, scheduled to be published after Wednesday’s closing bell in New York (Thursday morning AEDT).

Advanced Micro Devices helped lead the US market and rallied 8.8 per cent after announcing a multiyear deal during which it will supply chips to Meta Platforms to help power its AI ambitions. Under the agreement, Meta also got the right to buy up to 160 million shares of AMD stock for US1¢ each, depending in part on how many chips Meta ultimately buys. The series of transactions will be worth “double-digit billions” of dollars per gigawatt, AMD boss Lisa Su said.

It’s a reminder of the excitement that built in recent years about the billions of dollars pouring into AI. It also helped produce a sharp turnaround for the market from the day before, when worries about the potential downsides of AI shook Wall Street, particularly companies and industries that investors fear could be made obsolete.

IBM rose 2.7 per cent to recover some of its 13.1 per cent drop from Monday, which was its worst since 2000. Nvidia was up 0.7 per cent.

Outside of AI worries, big US companies continued to report mostly better profits than analysts expected. Keysight Technologies rallied 23.1 per cent for the biggest gain in the S&P 500 after topping analysts’ expectations for profit in the latest quarter.

With AP, Bloomberg

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