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ASX rebounds as investors reassess rates

ASX Market Wrap
Bond traders have sharply revised their interest rate bets but equity investors appear unconvinced. Picture: NCA NewsWire/ Gaye Gerard

Australian shares rebounded to start the week, posting solid gains to claw back some of the heavy losses sustained during Friday’s session, as interest-rate sensitive tech and real estate stocks rallied.

The benchmark S&P/ASX200 index advanced 0.8 per cent, or 61.5 points, to close at 7637.4, with all 11 industry sectors finishing in the green.

Meanwhile, the broader All Ordinaries fared slightly better, adding 0.9 per cent, to 7906.6.

The Australian dollar was trading at US65.56c against the greenback at 5pm.

As traders navigated the path of interest rates in Australia and abroad, NabTrade director of investor behaviour Gemma Dale said equity investors were betting that central bankers “would not break the economy” with a resumption of monetary tightening.

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“The equity market doesn’t seem to buy an (interest rate) increase,” Ms Dale said.

RESERVE BANK
Equity investors were not buying the prospect of another rate rise, NabTrade’s Gemma Dale said. Picture: NCA NewsWire / Christian Gilles

“Economists have certainly pushed out rate cut expectations and we know that cuts aren’t coming anywhere near as soon as everybody was hoping.

“But everyone on the sharemarket side is saying: ‘No, this isn’t happening’.”

Interest rate sensitive real estate and tech sectors were the strongest performing, both rising 1.7 per cent.

Goodman Group added 1.2 per cent to $31.19 while Wisetech rallied 1.9 per cent to $92.33.

Financials also advanced, with the big four banks all gaining.

CBA added 0.8 per cent to $113.84, while NAB, Westpac and ANZ all climbed 0.3 per cent.

Elsewhere, materials stocks advanced, up 0.5 per cent, with Fortescue adding 0.3 per cent to $25.67 and Rio Tinto rising 0.1 per cent to $130.98.

However, sector heavyweight BHP slipped 0.4 per cent to $42.97 amid speculation that it would up its offer to UK-listed mixed miner Anglo American.

Energy stocks were the biggest laggards, weighed down by Woodside off 0.3 per cent to $28.19 and Santos, down 0.8 per cent to $7.66.

In corporate news, money manager Perpetual advanced 3.1 per cent to $24.02 after it confirmed that it had entered talks with American global investment firm KKR & Co to sell its wealth and trust businesses.

Among the top performers was Uranium producer Boss Energy, which vaulted 9.1 per cent to $4.78.

Releasing its March quarter results, the company said it had produced its first barrel at its Honeymoon Project located in South Australia.

Liontown Resources' Kathleen Valley project in Western Australia will commence production by mid-2024, it announced. Picture: Supplied
Liontown Resources' Kathleen Valley project in Western Australia will commence production by mid-2024, it announced. Picture: Supplied

Battery metals producer Liontown Resources surged eight per cent to $1.21 as it announced its Kathleen Valley project was nearing completion.

The miner expects to deliver the project on budget with production commencing by the middle of the year.

Dental chain Pacific Smiles soared 14.7 per cent to $1.87 — its highest since July 2022 — after it recommended shareholders support a takeover from National Dental Care valuing the company at $303m.

Tech sector heavyweight Megaport slipped 1.3 per cent to $14.10 even as it upgraded its EBITDA guidance to between $56m and $58m, up from $51m to $57m.

Despite the increase, the results were weaker than analysts had been predicting.

Embattled gaming giant Star Entertainment rallied 6.4 per cent to 42c after its chair David Foster quit following revelations uncovered in an inquiry conducted by the NSW Independent Casino Commission.

Mr Foster will be replaced by existing director Anne Ward.

Finally, TPG Telecom added 5.3 per cent to $4.36. The internet service provider signed an agreement with Optus in an attempt to expand its coverage and slash spending.