ASX rises after Labor victory, global stock markets rebound

Australian shares opened higher on Monday, after Labor won the election after nearly a decade out of power.

The ASX 200 index rose 21 points, or 0.3 percent, to 7,164 at 10:11 AM ET.

The Australian dollar rose to 70.63 US cents at 10:11 AM ET.

Among the most prominent movers were Codan (+13.3%), Sheik (+9.1%), and A2 Milk (+5.1%).

With that said, Block fell 3.6 percent, Novonix lost 1.7 percent, and Zip stock fell 1.6 percent.

Global stock markets rebounded on Friday after the S&P 500 index pared losses that briefly pushed it into bear market territory.

China cut the key interest rate for five-year loans, which influences mortgage rates, by 15 basis points in a sharper-than-expected drop as authorities seek to mitigate the impact of an economic slowdown.

While a rally late Friday stopped the S&P 500 from confirming a bear market, Wall Street gloom sent the benchmark index down for the seventh consecutive week, an event that has occurred only five times since 1928, according to S&P Dow Jones Indexes. .

How long it takes to cash out in stocks will depend on when inflation collapses, said Peter Toze, chairman of Chase Investments in Charlottesville, Virginia.

The S&P 500 closed 0.01 percent higher after falling 2.27 percent at one point or less from the level that would confirm a bear market – a 20 percent drop from a record closing high on Jan. 3.

The Dow Jones Industrial Average rose 0.03 percent, and the Nasdaq Composite Index was already in bearish territory by 0.3 percent.

Stephen Outh, chief equity investment officer at Federated Hermes, said stock valuations need to fall and the expected return on investments, and the discount rate, should go up.

“The market is starting to get the idea that this could be a new world where the discount rate on risky assets is no longer zero,” Oth said.

“You see all these different areas of the market being bombarded at the same time and it was very worrying for investors,” he added.

The MSCI gauge of stocks in 47 countries closed 0.37 percent higher, but still fell for the seventh consecutive week, the longest losing streak since the index was launched in 1990.

Earlier in Europe, the regional Stoxx 600 index rose 0.73 percent.

US Treasury yields fell for the third consecutive session amid concerns about growth prospects. The yield on the benchmark 10-year note fell 6.5 basis points to 2.79 per cent.

Gold rallied, heading for its first week of gains in five weeks due to continuing concerns about economic growth and the dollar’s decline during the week.

Oil prices steadied, on course for little change during the week as a planned European Union ban on Russian oil offset concerns that slowing economic growth will hurt demand.

Brent crude rose, trading at $112.91 a barrel by 10:36 AM ET.

ABC/Reuters

published And updated

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