ASX rises as tech stocks bounce; Woodside hits one-month low

A rush back to mega-cap US tech stocks ahead of earnings results from sector heavyweights Tesla and Alphabet this week helped buoy local tech stocks on Tuesday.

The benchmark S&P/ASX 200 climbed 39.4 points, or 0.5 per cent, to 7971.1 at the close, snapping a three-day losing streak, led by a 1.6 per cent rally in the tech sector.

That is after the Nasdaq Composite rebounded strongly at the start of the week, climbing 1.6 per cent, ahead of quarterly results from Tesla and Google’s parent, Alphabet, which are expected to land on Wednesday morning (AEST).

Flight to mid-caps

The rally on Wall Street has partially unwound the flight to the US mid-cap sector last week prompted by further signs the US Federal Reserve was on the cusp of cutting interest rates, which led investors to rotate away from the previously strong mega-cap tech sector.

Nvidia leapt 4.8 per cent, after falling more than 7 per cent last week, and Tesla gained 5.2 per cent. Wei Li, global chief investment strategist at the BlackRock Investment Institute, said last week’s sell-off had provided “an opportunity to lean into” the tech sector.

“Looking through this near-term noise, we think tech will drive returns as consensus expects big tech companies to carry positive earnings results for the market,” she said.

“We expect this rebound [in smaller caps] to be short-lived as central banks likely hold rates higher for longer given persistent inflation pressure.”

Banks rallied alongside tech on the ASX. Commonwealth Bank rose 1.1 per cent to 133.14 and National Australia Bank gained 1.2 per cent to $37.36.

Stocks on the move

Woodside was the largest drag on the index, falling 3.7 per cent to $27.53 after revenue in the oil and gas giant’s June quarterly production fell below most analysts’ expectations. Shares touched a one-month low after falling 2 per cent in Monday’s session, when the company unveiled a $US900 million ($1.35 billion) plan to expand into the Gulf of Mexico.

Transurban added 1.3 per cent to $12.93 after the toll road operator
partnered with the Queensland government to widen the western section of the state’s Logan Motorway.

ASX debutant Axel REE slipped 40 per cent to 12.2¢ in its first session of trading. Shares were issued at 20¢ in the rare earths exploration company’s initial public offering.

Shares in Spartan Resources jumped 23.6 per cent to $1.23 after detailing a mineral resources upgrade at its Dalgaranga gold project in Western Australia.

Insignia Financial gained 6.8 per cent to $2.67 after analysts at Citi raised the stock to a neutral rating.

Burn treatment developer Polynovo rose 7.9 per cent to $2.60 after flagging a 57.5 per cent increase in revenue in the 2024 financial year, in part due to “the enormous” need for its product in conflict zones and developing countries.

And medical developer Mesoblast rose 13 per cent to $1.31, following news the Food and Drug Administration in the US had accepted a resubmitted application relating to one of the company’s treatments.