Australian equity markets staged a modest comeback on Tuesday, December 16, clawing back a portion of the previous day's significant losses. The recovery was spearheaded by robust performances in the heavyweight banking sector and mining stocks, which found support from rising copper prices.
Benchmark Index and Sectoral Moves
The benchmark S&P/ASX 200 index advanced by 0.2%, settling at 8,653.50 points. This uptick followed a sharp decline on Monday, where the index closed 0.7% lower, marking its most substantial single-day slide in more than three weeks.
Mining stocks played a pivotal role in the day's gains. The mining sub-index climbed 0.4%, buoyed by a surge in copper prices, which were elevated due to a weaker US dollar. This sector has been a standout performer in 2024, having gained nearly 35% so far this year, putting it on track for its best annual performance since 2016. Among the giants, Rio Tinto rose 1.1% and BHP added 0.4%, though Fortescue bucked the trend with a slight 0.4% dip.
Banking Stocks Rally to One-Month High
The financial sector emerged as another key driver of the market's recovery. The financials sub-index jumped as much as 1.2%, touching its highest level in over a month. This rally in banking stocks, which have risen more than 2% since the US Federal Reserve cut borrowing costs the prior week, presented a stark contrast to the stance of the Reserve Bank of Australia.
The local central bank has held its key cash rate steady and hinted at a potential end to its monetary easing cycle. Leading the charge, Commonwealth Bank of Australia (CBA) advanced 1.6%, while the other three of the "Big Four" banks saw gains ranging between 1.1% and 1.9%.
Tech and Energy Sectors Face Headwinds
Not all sectors shared in the positive sentiment. The technology segment remained under pressure, extending its losing streak to a seventh consecutive session. The local tech stock index dropped as much as 2.2%, hitting its lowest point in over eight months. Notably, software firm Xero fell 2.6% to a nearly two-year low.
The energy sector also struggled, with its sub-index dipping up to 0.8% to a three-week low, mirroring a slide in global oil prices. Major players Woodside Energy and Santos both slipped 0.9%. Gold miners edged 0.1% lower as bullion prices pared gains from Monday, with Evolution Mining rising 0.6% while Northern Star Resources fell 0.3%.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index was largely flat, closing at 13,405.57 points. The day's trading in Australia highlighted a market finding selective support, with traditional sectors like banking and resources offsetting continued weakness in growth-oriented areas like technology.
