Market Update: ASX Extends Gains as Uranium Stocks Lead (1:55 pm AEST)
As of 1:55 pm AEST on 24 April, the S&P/ASX200 continues to climb, up 49.00 points or 0.62% at 7,969.50. Paladin Energy Ltd leads the rally with an 11.29% surge, followed by Boss Energy Ltd, up 9.77%. The index has gained 1.92% over the past five days, though it remains 2.32% lower year-to-date.
ASX Performance
Six sectors are in the green, with Materials up 1.23%, followed by Information Technology (+1.06%), Health Care (+0.79%), Financials (+0.78%), Real Estate (+0.77%), and Telecommunication (+0.24%). Meanwhile, five sectors are in decline: Discretionary (-0.02%), Utilities (-0.03%), Industrials (-0.04%), Staples (-0.50%), and Energy (-0.59%).
ASX Climbs as Energy Stocks Soar (As of 12:49 PM)
The S&P/ASX200 index rallied on 24 April, gaining 44.90 points or 0.57% to reach 7,965.40 by 12:49 pm AEST. The charge was led by uranium and energy stocks, which saw strong investor interest amid growing optimism around the sector. Paladin Energy Ltd (ASX: PDN) surged 9.58% to $5.44, while Boss Energy Ltd (ASX: BOE) rose 9.39% to $2.87, making them the top-performing stocks on the index.
ASX Performance
This momentum comes despite a broader backdrop of global uncertainty and rate speculation, with the ASX200 now up 1.87% over the past five trading days. However, year to date, the index remains 2.37% lower.
Uranium Surge Leads Materials Sector
Materials emerged as the top-performing sector on the day, rising by 1.34%, thanks in large part to investor enthusiasm for uranium and mining stocks. Alongside Paladin and Boss Energy, other uranium-related firms such as Deep Yellow Ltd (ASX: DYL) and Lotus Resources Ltd (ASX: LOT) climbed 8.02% and 10% respectively.
Copper stocks also contributed to the rally. Capstone Copper Corp. (ASX: CSC) jumped 8.26% to $7.60, boosted by a 125% surge in trading volume compared to its 90-day average.
In total, six out of eleven ASX sectors posted gains, with Information Technology up 1.13%, Health Care up 0.74%, and Financials up 0.71%. Real Estate and Telecommunication also edged higher.
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ASX Volume Leaders Point to Renewed Investor Interest
A spike in trading volumes across several companies further reflected growing market activity. Stanmore Resources Ltd (ASX: SMR) recorded a massive 748% jump in volume, trading over 11 million shares. ResMed Inc (ASX: RMD), which gained 7.61% to $35.78, also saw its volume surge by 255%.
Clarity Pharmaceuticals Ltd (ASX: CU6) and Newmont Corporation (ASX: NEM) also posted volume increases of 91% and 88% respectively, suggesting heightened investor interest across the board.
Mixed Results for the Day’s Biggest Movers
While the gains in the energy and materials sectors stole the spotlight, some stocks saw significant declines. Generation Development Group Ltd (ASX: GDG) plunged 16.60% to $4.045, making it the worst performer of the day. PWR Holdings Ltd (ASX: PWH) followed with a 6.12% loss, closing at $6.29.
Other notable laggards included Titomic Ltd, Amplitude Energy Ltd (ASX: AEL), and Adriatic Metals Plc (ASX: ADT), each falling between 3.8% and 4.2%.
Westpac Tips May Rate Cut Regardless of Inflation Data
In a bold forecast, Westpac’s Chief Economist Luci Ellis said the Reserve Bank of Australia (RBA) will cut interest rates at its upcoming 20 May meeting, regardless of the March quarter inflation figures due next week.
“Lock it in,” Ellis wrote in her latest note. “The RBA is expected to cut by 25 basis points, taking the cash rate to 3.85%.”
She attributed the shift to rising global uncertainty, particularly from geopolitical developments and the knock-on effects of US tariff threats. According to Ellis, these factors are already causing slower global growth and increased disinflationary pressure, especially from China.
Inflation Uncertainty Takes Backseat
Ellis argued that even if Australia’s inflation data shows less easing than hoped, the RBA cannot justify holding rates steady.
“Holding rates in the face of global turmoil and a softening labour market – all for a 0.2 percentage point inflation miss – would be hard to defend,” she said.
Westpac now expects three rate cuts in 2024: one each in May, August, and November, totalling a 75 basis point reduction. However, Ellis acknowledged the risks are now skewed towards a faster or deeper policy shift if international developments worsen.
Could the RBA Finally Return to Round Numbers?
Interestingly, Ellis floated the idea that the RBA might take this opportunity to restore the traditional quarter-point increments for the official cash rate. Since November 2020, the RBA has made several “unusual” moves, such as raising the rate from 0.25% to 0.35%, then to 0.85%, and so on.
She said that if the board were to adjust the rate by 35 basis points to return to a 3.75% level, the upcoming May meeting would be the right moment to do it. Still, she labelled this a remote possibility.
Investors Eye Policy Pivot
For now, the market is pricing in a dovish pivot from the RBA in the coming months, especially given the global landscape. Westpac’s confidence in an upcoming rate cut may further bolster risk sentiment and equity valuations in the short term.
The May meeting will not only be closely watched for the rate decision itself but also for any signal from the RBA about its future approach to monetary policy amid increasing global economic uncertainty.
