ASX: Bourse books three-day winning streak as health care stocks rally, Arcadium soars

Australian shares notched their third consecutive day of gains on Tuesday – their longest winning streak of 2024 – after US stocks rallied to record levels.

At the closing bell, the S&P/ASX200 rose 0.5 per cent, or 38.3 points, to 7,514.9, while the broader All Ordinaries also climbed, adding 0.5 per cent to reach 7,742.1.

The Australian dollar was higher, buying US65.97c against the greenback, up 0.4 per cent.

Josh Gilbert, market analyst at eToro, said after a challenging start to the year, stocks would ultimately benefit from the tailwind of rate cuts, even if the US Federal Reserve didn’t deliver them by March.

“We may start to see some of that rotation to some of those cheaper sectors that are more sensitive to rate cuts and that our view of sort of a soft landing. So that will start to happen as you get sort of closer to those rate cuts,” Mr Gilbert said.

“I don’t really see any reason why this market doesn’t have room to keep moving higher.”

Locally, eight of 11 industry sectors finished in the green, led by a rally in health care stocks which rose 1 per cent.

Its gains were led by Ansell, up 1.8 per cent to $24.11, while Cochlear added 1 per cent to $301.99, CSL rose .97 per cent to $293.34 and Ramsay Health Care climbed 1.2 per cent to $51.45.

Amid reports that Beijing is considering a fresh round of stimulus to help stabilise its slumping stock market, iron ore futures rallied in Singapore to reach $US131.25 a tonne, up 1.8 per cent.

Locally, ASX heavyweight BHP added 1 per cent to $46.30, while Fortescue also finished higher, rising 0.8 per cent to $28.05.

However, without a comprehensive stimulus package, Mr Gilbert said any relief to Chinese stocks would likely be temporary.

“Unfortunately, that drip-fed stimulus has really not done what I think policymakers had expected. We’re already starting to see some optimism begin to fade,” he said.

On Wall Street overnight, the S&P 500 firmed 0.2 per cent higher to reach a fresh record, while the Dow Jones Industrial Average rose 0.4 per cent, sailing past the 38,000 points mark for the first time.

In corporate news, Arcadium Lithium was the best performer on the benchmark, adding 4.7 per cent to $7.85. Macquarie initiated coverage on the lithium miner with an outperform rating and a price target of $11.

IDP Education plunged 5.9 per cent to $20.77 to be among the biggest laggards. The fall came after the Canadian government announced it would make changes to its intake of international students, which could impact its services.

Medical device company Polynovo jumped 6.3 per cent to $1.85, following a trading update. Having reported a 65.6 per cent increase in revenue to $48.8 million, the company received a number of target price lifts.

Viva Energy shares slipped to $3.33, down 0.3 per cent, after providing a trading update for the December quarter. While the company posted a gross refinery margin of $US8.8 a barrel, the firm cited a period of weaker regional margins.

Judo Bank soared 16.6 per cent to $1.09 after its pre-tax profit rose 24 per cent to $67m in the first half, according to unaudited figures. The bank said the result was due to above-system lending growth, strong net interest margins of 3.02 per cent, and minimal write offs.

Karoon Energy dipped 4 per cent to $1.79, as it cut its guidance for its Brazilian operations. The firm expects to produce 7.2 to 9 million barrels of oil, down from its previous estimate of 8 to 10 million, owing to operation issues at its Baúna Project.

Embattled airline Qantas rose 0.8 per cent to $5.37 as it announced its group executive for corporate affairs, Andrew McGinnes, was leaving the company after nearly 13 years. The national carrier has also appointed Andrew Walduck as its new chief information officer.

Coronado Global Resources surged 3.1 per cent to $1.68, as it reported a 3.3 per cent increase in coal production for the December quarter to 6.1Mt, when compared to the quarter prior. The company said it expected continued strong demand from China and India would support metallurgical coal prices in the March quarter.

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