Shares rise; AGL rallies 6pc after profit upgrade; ANZ drops

The Australian sharemarket advanced at the open following an extended rally in New York on expectations that the Federal Reserve may have more room to lower interest rates as the year progresses.

The Reserve Bank will make its cash rate decision today at 2.30pm AEST, which will then be followed by a press conference by governor Michele Bullock.

The benchmark S&P/ASX 200 Index rose 0.8 per cent, or by 57.6 points to 7740 at the opening bell, buoyed by sharp gains in mining and utilities stocks.

The utilities sector was the best performing sector, led by sector heavyweight AGL Energy after it upgraded its profit guidance for financial year 2024. The energy provider forecasted underlying earnings before interest tax depreciation and amortization to be between the range of $2,120 million and $2,200 million.

In commodities, mining stocks tracked a higher iron ore price as the steel making commodity rose 2 per cent in Singapore, nearing $US120 a tonne. BHP rallied 1.2 per cent.

Overnight on Wall Street, the S&P 500 rose 1 per cent to 5180.7. Nvidia leapt 3.8 per cent, rising above $US920 to its highest since late March.

“This bull market is still quite young,” Carson Group strategist Ryan Detrick said in a post on X. Looking at the past 12 bull markets showed the average is just over 60 months, compared with the current 19-month expansion.

Equities have had their best three-day rally since November, according to Bloomberg.

Adam Turnquist, chief technical strategist for LPL Financial, said based on a backdrop of bullish market breadth and improving momentum, a close above the 50-day moving average would be a good sign for the pullback being over.

Turnquist said if the S&P 500 holds above April’s early lows in the 5150 area, the next resistance hurdle would be the March high of 5254.

Stocks on the move

ANZ dropped 1.4 per cent after reporting a 7 per cent decline in cash profit at $3.55 billion in its first half results. The major bank also announced a $2 billion share buyback and declared its proposed interim dividend at 83¢ per share, partially franked at 65 per cent.

Global agriculture merchant Louis Dreyfus has increased its takeover offer for Namoi Cotton to 67¢ a share. It previously lobbed its bid for the company at 60¢ a share. Namoi added 2.1 per cent.