ASX closes below 8000 mark after soft rebound as energy stocks soar

Suncorp shares jumped 2.4 per cent, IAG shares were up 1.7 per cent, QBE was trading 1.3 per cent stronger. The rises come after the nation’s biggest insurers have been warned to lift their game when dealing with vulnerable Australians.

The materials sector was up, buoyed by BHP, the largest Australian mining company (up 0.6 per cent), while Rio Tinto made further gains, leaping 3.1 per cent. Goldminer Newmont gained 0.6 per cent as investors fled to safe-haven assets such as gold, while Fortescue slipped 0.4 per cent.

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The big four banks had a mixed day, yet to recover from the steep sell-off on Friday, with NAB (down 0.2 per cent) falling. Westpac and CBA, the nation’s biggest lender, pared back gains made in early trade to close lower, down 0.6 per cent and 0.2 per cent, respectively. ANZ was the only big four bank trading in the green, up 0.2 per cent.

Telco stocks slipped into the red, dragged by Telstra and CAR Group slipping 1 per cent each. Biotech heavyweight CSL weighed on healthcare stocks, with its shares down 1.6 per cent.

The lowdown

Judo Bank chief economic advisor Warren Hogan said in a note to clients that the economy could potentially bounce back despite ongoing uncertainty around the economic outlook due to the upcoming federal election, geopolitical issues and persistent cost and inflation pressures.

“The improvement in economic growth as consumer spending picks up momentum confirms our view that the soft landing for the economy is in the rearview mirror. We are now in the early stages of an economic recovery,” he said.

In the US, during Wall Street’s latest trading session on Friday night, the S&P 500 climbed 0.6 per cent, coming off a punishing stretch in which it swung more than 1 per cent, up or down, for six straight days.

The Dow Jones Industrial Average added 222 points or 0.5 per cent, and the Nasdaq composite rose 0.7 per cent. The wild week, which was the worst for the S&P 500 since September, left the index a little more than 6 per cent below its all-time high set last month.

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The whiplash actions from the White House on tariffs – first placing them on trading partners and then exempting some and then doing it again – have raised uncertainty for businesses.

That sparked fears businesses might freeze in response to what they have described as “chaos” and pull back on hiring. US households, meanwhile, are bracing for higher inflation because of tariffs, which is weakening their confidence and could hold back their spending. That would sap more energy from the economy.

Trump said on Friday that he wants tariffs to bring jobs back to the United States and gave no indication more certainty is imminent for financial markets.

“There will always be changes and adjustments,” he said in comments from the Oval Office.

“There could be some disturbance,” he said about the effect on the economy before saying, “I solved a little bit of that” by giving a one-month reprieve on tariffs for Mexican and Canadian imports for automakers.

Tweet of the day

Quote of the day

“It’s a standalone restaurant, no one walking past the front doors. You have to make a conscious decision to go: ‘I want Five Guys’.”

That’s Phil Keelan, the head of Australian operations at US burger chain on their slow but steady attempt to resonate with customers to crack the Australian market. You can read more of Jessica Yun’s piece here.

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With AP

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