Even a shock 1 per cent rate rise might not be enough to knock the market, Bassanese says. “The equity market could still rally, on the view that we’d potentially be closer to the end of Fed tightening.”
The materials sector led Tuesday’s gains with a 2.7 per cent rise. BHP closed 3.5 per cent higher and Rio was up 2.5 per cent. The energy sector rose 2 per cent, while the big four banks all rose more than 1 per cent.
Coal miner New Hope surged as much as 8 per cent after it reported record full-year results thanks to higher coal prices.
In contrasting news, billionaire Andrew “Twiggy” Forrest’s Fortescue Metals Group revealed plans to spend $9 billion to eliminate fossil fuel use and achieve zero terrestrial emissions in its iron ore mining, supplying its customers with a carbon-free product by 2030.
The money will be mostly used for rolling out 2 to 3 gigawatts of renewable energy generation and battery storage to power a green mining fleet, electrifying Fortescue’s rail locomotive ore haulage system in the process. Fortescue’s stock rose more than 1 per cent after the news, but ran out of steam and closed 0.3 per cent lower.
KMD Brands, which operates the Kathmandu, Rip Curl and Oboz brands, said it grew group sales by 6.2 per cent for the year to a record $NZ979.8 million ($868 million).
Demand at Kathmandu and Rip Curl bounced back strongly in the second half as customers returned to travel and outdoor activities, delivering Kathmandu record sales in the fourth quarter. Chief executive Michael Daly said momentum had continued in the first weeks of the new financial year.
In global markets, a choppy day of trading on Wall Street ended with stocks closing higher overnight as investors braced for another big interest rate increase from the US Fed.
The indexes swayed between modest gains and losses for much of the session before a burst of buying in the final hour of trading. The S&P 500 closed up 0.7 per cent, climbing back from a 0.9 per cent slide. The Dow Jones Industrial Average rose 0.6 per cent and the Nasdaq climbed 0.8 per cent.
Trading volume was lower than usual, a sign most traders were not eager to make big changes ahead of the Fed’s interest rate policy announcement on Wednesday afternoon local time, said Scott Ladner, chief investment officer at Horizon Investments.
“No one really wants to position ahead of it,” he said. “It’s been such a slippery market on both the upside and the downside.”
Average long-term US mortgage rates climbed above 6 per cent last week for the first time since the housing crash of 2008. The higher rates could make an already tight housing market even more expensive for American homebuyers.
Tweet of the day:
Quote of the day: ”This is an investment that I think every company in the world ought to make, and an investment which, now that you can see that it can be done, every heavy industry should step out and do.” Fortescue founder Andrew ‘Twiggy’ Forrest on the company’s multi-billion dollar investment to stop using fossil fuels.
You may have missed: While Twiggy was extolling the virtues of going carbon free, New Hope Coal chief executive Rob Bishop was reminding investors of the “phenomenal” money being made from coal, following the company’s record profit.
Despite a decline in sales volume over the year, soaring thermal coal prices sent the coal miner’s earnings soaring more than ten-fold to $983 million for the year to July.
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