Wall Street’s positive end to last week, following US Federal Reserve Chair Jerome Powell’s bullish comments at the Jackson Hole Economic Symposium on Friday, has set the stage for a good start to the week for Australian stocks.
The S&P/ASX 200 rallied 31.60 points, or 0.39%, to 8,055.50 points at 10:28am AEST on Monday (26 August).
Eight of the 11 sectors are higher over the last week. The information technology sector is leading the run up with an 8.65% advance. Materials was up 1.79%, industrials climbed 2.14%, but energy edged back 3.28%.
Powell said at the symposium in Wyoming that the Fed’s restrictive monetary policy helped restore balance between aggregate supply and demand, easing inflationary pressures and ensuring that inflation expectations remained well anchored.
“Inflation is now much closer to our objective, with prices having risen 2.5% over the past 12 months,” he told the gathering.
“After a pause earlier this year, progress toward our 2% objective has resumed. My confidence has grown that inflation is on a sustainable path back to 2%.”
The expectation had been that Powell would temper rate cut expectations, but the consensus among economists following his speech at Jackson Hole is that short of an unexpected jobs market collapse in August, the US remains on track to start cutting rates with a reduction of 25 basis points in September.
The top performing stocks in the S&P/ASX 200 in early trade included uranium players Deep Yellow (ASX:DYL) and Boss Energy (ASX:BOE), climbing 13.5% and 12.03% respectively.
Over the last five days, the index has gained 1.06% and is currently 1.14% off of its 52-week high.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: US Federal Reserve
