Australian shares follow US higher but miners struggle

The ASX200 index was up on the back of Wall Street’s surge on Friday.

The local bourse has marched higher after US markets climbed to record levels on Friday amid a tech resurgence.

The benchmark S&P/ASX200 index on Monday finished up 55.4 points, or 0.75 per cent, at 7,476.6, while the broader All Ordinaries climbed 50 points, or 0.65 per cent, to 7,702.3.

Wall Street bounced back from a slow start to the year, with the tech-heavy Nasdaq index jumping 1.7 per cent on Friday to a two-year high.

Technology traders were in an optimistic mood after the Taiwan Semiconductor Manufacturing Company – which produces more than half the world’s semiconductors – announced it expects revenues to grow by more than 20 per cent in 2024.

Miners and utilities were the only official ASX sectors to finish the day in the red.

Investors punished lithium stocks amid warnings the price in the critical mineral will continue to fall.

Liontown Resources plunged 21.3 per cent to 94c after lenders pulled a $760 million loan for its Kathleen Valley lithium project in Western Australia.

The Perth-based company announced a review into the future of the project but remained bullish about its prospects.

“Liontown remains confident in the long-term outlook of the lithium market and Kathleen Valley’s status as a Tier 1 long-life producer,” the board said in an announcement to the share market on Monday morning.

Fellow lithium miner Mineral Resources slumped 9.6 per cent while South32 dipped 2.8 per cent after the diversified miner reported weaker-than-expected production figures for the second quarter.

“We expect to see consensus reductions to financial year 2024 earnings and cash flow estimates on the back of this update,” RBC Capital Markets analyst Kaan Peker said.

The heavyweight iron ore miners fared better, with BHP up 0.3 per cent, Fortescue 0.9 per cent higher and Rio Tinto basically flat.

Tech stocks followed their US counterparts higher. Logistics software provider Wisetech climbed 0.9 per cent while Life360 jumped 4.8 per cent.

It was less rosy for troubled artificial intelligence company Appen, which dived 40.2 per cent after key client Google cancelled an $82.8 million per year contract.

The news was “unexpected and disappointing”, the board said in an ASX announcement in which it also unveiled a $20.4 million loss for 2023.

Solid gains from the big banks led financial stocks higher, amid predictions increased lending margins will drive profits higher.

Morningstar equity analysts Nathan Zaia and Winky Yingqi Tan forecast banks’ net interest income – which makes up 80 to 85 per cent of revenue – to grow four per cent per year to financial year 2026.

CBA climbed 1.3 per cent to an all-time high of $114.80, while ANZ firmed 1.4 per cent to $26.50 – its highest level since May 2022.

NAB and Westpac both rose 1.1 per cent.

Buy now, pay later company Zip surged 16.5 per cent after announcing it would return to profitability in the first half of 2024 for the first time since 2021.

The Australian dollar was buying 65.92 US cents, from 65.77 US cents at Friday’s ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index finished Monday up 55.4 points, or 0.75 per cent, at 7,476.6.

* The broader All Ordinaries climbed 50 points, or 0.65 per cent, to 7,702.3.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 65.92 US cents, from 65.77 US cents at Friday’s ASX close

* 97.59 Japanese yen, from 97.79 Japanese yen

* 60.46 Euro cents, from 60.54 Euro cents

* 51.83 British pence, from 51.96 pence

* 107.82 NZ cents, from 107.88 NZ cents.