Utilities (down 0.4 per cent) was the only sector that closed in the red as AGL lost 4.3 per cent, Meridian Energy fell 2.3 per cent, and Mercury NZ declined 0.5 per cent.

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Coal miners were also weaker as Whitehaven shed 1.4 per cent and Yancoal slipped 0.7 per cent. Healthcare equipment provider EBOS Group (down 1.2 per cent) and infrastructure investment firm Infratil (down 0.8 per cent) were also among the biggest mega-cap decliners.

The lowdown

Interest-rate sensitive REITS and technology companies led the gains on the local bourse on the back of growing expectations the Reserve Bank will begin to cut rates later this year.

It comes as data this week, including quarterly inflation figures, suggest the economy could be heading towards a soft landing without the need for further rate hikes.

AMP chief economist Dr Shane Oliver said Australian shares have probably run ahead of themselves, but that the good news on interest and inflation could underpin another year of gains.

“US and Australian shares hitting records after a brief consolidation into mid-January has left them overbought, which, together with positive investor sentiment, leaves them vulnerable to a short-term correction as we come into the seasonally softer months of February and March,” he said.

Overnight, Wall Street burst out of its hangover, as US stocks bounced back in a widespread rally following their worst day since September.

The S&P 500 gained 1.2 per cent to recover three-quarters of its sharp loss from the day before. The Dow Jones rose 1 per cent, while the Nasdaq composite leaped 1.3 per cent.

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Big Tech stocks led the way in a mirror reversal of the day before, when Alphabet and Microsoft sank despite reporting stronger profits than analysts expected.

Big Tech stocks are Wall Street’s most influential because they’re the biggest, and they’re facing high expectations after soaring much more than the rest of the market last year.

Meta Platforms, the owner of Facebook and Instagram, was a star in after-hours trading, surging more than 14 per cent after topping analysts’ expectations for profit and revenue, and saying it would start paying its shareholders a dividend.

Stocks broadly got a boost following a suite of reports suggesting the economy remains solid, while pressures on inflation may be easing. Such data could give the Federal Reserve more of the evidence it wants of a slowdown in inflation before it will deliver the cuts to interest rates that investors crave. A day earlier, stocks fell sharply after the Fed’s chair warned it doesn’t have enough such evidence.

Tweet of the day

Quote of the day

“You can see the advent of the internet changed the dynamics of the marketplace for virtually every product,” said franchising consultant and DC Strategy chairman Rod Young after the demise of 93-year-old retailer Godfreys.

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Banks have started cutting fixed interest rates on home loans in an attempt to win customers seeking certainty on their repayments, as markets bet the Reserve Bank will respond to slowing inflation by reducing official rates later this year.

With AP

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