ASX slides into red despite gold miners, Broncos basking in the glow

The Australian sharemarket ran out of puff after breaking the 9000-point barrier earlier in the day to fall into negative territory as local technology stocks dialled in a poor session.

The S&P/ASX 200 closed six points weaker at 8981.4, with five of the 11 industry sectors in the green. The technology sector was the biggest weight on the index, but mining and energy stocks were able to contain most of the damage.

WiseTech closed 2.2 per cent weaker, while Xero slumped 2 per cent. Other tech stalwarts like Life360 (down 1.1 per cent) and TechnologyOne (down 0.9 per cent) also fared poorly.

While the local market briefly edged above its best-ever daily close of 9019.1 set on August 21 before retreating, analysts say the ASX could top this record and its intraday peak some time this week.

In a strong start to the historically positive fourth quarter, investors have shrugged off a partial US government shutdown and delays to key economic data to push Wall Street indices to multiple record highs last week, while hopes of further interest rate cuts sent gold and Bitcoin to fresh peaks.

“Historically, shutdowns fail to dampen investor sentiment,” Capital.com market analyst Kyle Rodda said.

“To provide a historical precedent, the S&P 500 rallied more than 10 per cent during the last lockdown in 2018/19.”

Gold topped $US3900 ($5912) an ounce for the first time early in Monday’s session, while Bitcoin spiked to a fresh peak above $US125,700 ($190, 353) on crypto exchange Binance over the weekend.

Large cap miners BHP (down 0.4 per cent) and Rio Tinto (down 1.2 per cent) traded lower, counterbalancing rallies in ASX-listed gold miners Northern Star (up 1.6 per cent), Evolution Mining (up 2.5 per cent) and Newmont (up 2.4 per cent).

Financial stocks are mixed as they shed their early gains. Westpac rose 0.2 per cent, Commonwealth Bank – the biggest stock on the index – edged up 0.3 per cent, and National Australia Bank closed 0.2 per cent stronger. However, ANZ retreated by 0.5 per cent.

The rebound in energy stocks came as oil prices rallied after OPEC’s flagged November production hikes were ultimately more modest than feared, helping Woodside shares sail 0.7 per cent higher. Santos lost 0.3 per cent, while Ampol, the nation’s biggest refiner, gained 0.2 per cent.

Brent rose above $US65 a barrel, while West Texas Intermediate was near $US61. At a meeting on Sunday, OPEC and partners, including Russia, backed a 137,000-barrel-a-day increment, well below some of the possible figures reported before the decision.

The Brisbane Broncos’ investors were all smiles on Monday, with shares in the company rising 27 per cent a day after the club won the NRL grand final.

US stocks ticked higher on Friday, sending Wall Street to more records.

The S&P 500 edged up by less than 0.1 per cent to close out its seventh winning week in the past nine, and the Dow Jones climbed 238 points, or 0.5 per cent. Both added to their all-time highs set the day before. The Nasdaq composite lost an early gain and slipped 0.3 per cent from its own record.

Usually, the first Friday of each month has Wall Street transfixed on the monthly jobs update that the US government publishes. It shows how many jobs employers created and destroyed, while also updating the unemployment rate.

Such data is particularly important now, given how much on Wall Street is riding on the expectation that the job market is continuing to slow by enough to get the Federal Reserve to keep cutting interest rates. But the shutdown of the US government, now in its third day, is delaying the release.

So far, the US sharemarket has looked past such delays, including Thursday’s scheduled report on unemployment claims.

Past government shutdowns have tended not to hurt the US economy or the market much, and the thinking is that this one could be similar, even if President Donald Trump has threatened large-scale firings of federal workers.

That leaves excitement around artificial intelligence and the massive spending under way because it is one of the main drivers of the US stock market, which has been setting record after record.

The industry got another boost after Japan’s Hitachi signed a memorandum of understanding with OpenAI related to powering AI. It followed an earlier set of announcements by OpenAI with South Korean companies, which vaulted stock prices higher there.

AI stocks have become so dominant, and so much money has poured into the industry that worries are rising about a potential bubble that could eventually lead to disappointment for investors.

Nvidia, the stock that’s become the poster child of the AI boom, lost an early gain during the morning to finish with a dip of 0.7 per cent.

In the bond market, the yield on the 10-year Treasury rose to 4.12 per cent from 4.1 per cent late on Thursday.

Reports came in mixed on activity for US businesses in the healthcare, real estate and other services industries. One report from the Institute for Supply Management said growth was stalling, while another from S&P Global said it was still growing slowly.

With AAP and AP

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