The local share market has enjoyed a third straight day of gains as United States investors remain bullish the Federal Reserve will aggressively slash rates.
The benchmark S&P/ASX200 index on Tuesday finished up 38.3 points, or 0.51 per cent, at 7,514.9, while the broader All Ordinaries rose 39.8 points, or 0.52 per cent, to 7,742.1.
Wall Street continued to build on its hot start to the year overnight, with the Dow Jones and Nasdaq both finishing up 0.4 per cent, while the S&P 500 climbed 0.3 per cent to a fresh record high.
In a speech to the Brookings Institution earlier in January, Federal Reserve board member Christopher Waller reiterated the Federal Open Market Committee’s projection of three 25 basis point cuts in 2024.
But with the Fed in a media blackout ahead of its January 31 meeting and in the absence of any substantial economic data, futures markets seem to be paying little heed and continue to price in at least five 25 basis point cuts by the end of 2024.
Domestically, the NAB business survey showed a softening in business conditions in December alongside a reduction in the growth of labour and purchasing costs.
“This is good news for the inflation outlook and means that businesses are reporting a noticeable moderation of labour and input costs,” CreditorWatch chief economist Anneke Thompson said.
Health care stocks and financials drove the market higher, while real estate, consumer discretionary and energy were the only sectors in the red.
CSL rose 1 per cent, sleep apnoea device company Resmed climbed 1.1 per cent and private hospital network Ramsay Healthcare grew 1.2 per cent.
Judo Bank surged 16.6 per cent after the small and medium enterprise-focused lender reported half-yearly profit before tax increased 24 per cent to $67 million.
Investors will now focus on the company's ability to improve their funding mix and net interest margins while also growing the lending book, says Andrew Dale, portfolio manager at ECP Asset Management.
"In recent months there has been debate as to whether Judo can restore its lending margins in what has been a competitive environment," he said.
"Today's report suggests they can."
The big banks built on Monday's gains with CBA and ANZ up 0.8 per cent and 0.5 per cent respectively to fresh highs.
NAB was 1 per cent higher and Westpac rose 0.8 per cent.
Natural gas producer Cooper Energy rallied 13.6 per cent after losing almost a quarter of its value on Monday.
A solid five per cent production uplift at its Orbost Gas Plant was offset by the previous day's announcement the commissioning cost of its Basker Manta Gummy wells would increase to $240-$280 million, RBC Capital Markets analyst Gordon Ramsay said.
Karoon Energy fell 4 per cent after the oil and gas company downgraded production estimates at its Brazilian assets.
Iluka resources gained 2.2 per cent after the critical minerals company announced it will continue to pause operations at one of its synthetic rutile mines for the rest of 2024 until demand bounces back.
The heavyweight miners were mixed, with BHP up 1 per cent, Fortescue Metals up 0.8 per cent and Rio Tinto down 0.2 per cent.
The Australian dollar was buying 66.02 US cents, from 65.92 US cents at Monday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Tuesday up 38.3 points, or 0.51 per cent, at 7,514.9.
* The broader All Ordinaries climbed 39.8 points, or 0.52 per cent, to 7,742.1.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.02 US cents, from 65.92 US cents at Monday’s ASX close
* 97.65 Japanese yen, from 97.59 Japanese yen
* 60.57 Euro cents, from 60.46 Euro cents
* 51.87 British pence, from 51.83 pence
* 108.20 NZ cents, from 107.82 NZ cents.
