Australian stocks have risen, led by gains in technology shares following a Wall Street rally and mining shares on new strength in commodity prices, while AGL Energy fell as plans for its spin-off were withdrawn.
- The announcement of AGL has promoted the resignation of its president and CEO
- Wall St rebounded on better-than-expected US consumer spending data for April.
- European stocks hit three-week highs
The ASX 200 closed up 104 points, or 1.5 percent, at 7,287.
The Australian dollar rose to 71.85 US cents at 4:22pm AEST.
Shares of AGL Energy fell 1.7 percent to $8.72 after news of the company abandoning plans to spin off its coal-focused generation business.
He has led four senior board members to resign.
Technology stocks led gains in the benchmark, rising more than 4.6 percent, following a strong Wall Street rally from Friday, with shares of Block and Xero up 10.9 percent and 5 .2 percent, respectively.
Miners rose around 2.3 percent to hit their highest level since April 29, with sector giants BHP Group, Rio Tinto and Fortescue Metals Group adding between 0.4 percent and 2.8 percent. .
Financials added 0.6 percent.
ANZ rose 0.4 percent to $25.77 despite being sued by corporate watchdog ASIC for allegedly misleading its customers about how much they have left to spend on their credit card accounts.
ACCC sues Mastercard for abuse of market power
The ACCC initiated a Federal Court proceeding against Mastercard for alleged conduct intended to substantially lessen competition in the provision of debit card acceptance services.
Mastercard’s alleged anti-competitive conduct began in late 2017 in the context of the Reserve Bank of Australia’s least-cost routing initiative.
The RBA’s Least Cost Routing initiative was intended to increase competition in the provision of debit card acceptance services and reduce payment costs for businesses by allowing them to choose the lowest cost network to process their transactions.
This allowed businesses to choose whether their debit transactions were processed with Visa, Mastercard or eftpos, with eftpos often being the cheapest option.
It is alleged that in response to the least cost routing initiative, Mastercard entered into agreements with more than 20 major retail companies, including supermarkets, fast food chains, and clothing retailers.
The agreements gave these companies discounted rates for Mastercard credit card transactions, provided they agreed to process all or most of their Mastercard-eftpos debit card transactions through Mastercard instead of the eftpos network.
“We are concerned that Mastercard’s alleged conduct meant that companies did not receive the full benefit of the increased competition that the least-cost routing initiative was intended to generate,” said ACCC President Gina Cass-Gottlieb.
“Reducing costs for businesses allows them to offer better prices to their customers. Ensuring that the major card schemes, Mastercard, Visa and eftpos, compete vigorously is important to both those businesses and their customers.”
Stocks are trading higher globally
Global markets enjoyed a broad-based rally on Friday.
Wall Street rallied after the data, with all three major US stock indexes decisively ending their longest weekly losing streaks in decades.
The US Federal Reserve, in its May meeting minutes released earlier this week, called inflation a serious concern.
Most central bankers backed two half-percentage-point rate hikes in June and July as the group tries to curb inflation without causing a recession.
The Fed left room for a pause in hikes if the economy weakens.
Analysts said consumer spending and inflation data were encouraging and supported second-quarter growth estimates that are mostly above a 2.0 annualized rate.
“The growth engine of the US economy is still alive and kicking, and that’s important,” said Joe Quinlan, head of CIO market strategy for Merrill and Bank of America Private Bank.
“Growth Estimates for [the second quarter] they are still good. There is a better tone in the market than we have seen in recent weeks, in terms of inflation possibly peaking here. Maybe we can avoid stagflation.”
The MSCI World Equity Index, which tracks stocks in 45 countries, rose 2.12 percent.
European shares hit a three-week high and rose 1.42 percent. Britain’s FTSE also hit a three-week high and was headed for its best weekly performance since mid-March.
The Dow Jones Industrial Average rose 575.77 points, or 1.76 percent, to 33,212.96, the S&P 500 gained 100.4 points, or 2.47 percent, to 4,158.24 and the Nasdaq Composite added 390. 48 points, or 3.33 percent, to 12,131.13.
In oil markets, Brent crude was higher, trading at $120.16 a barrel, at 4:25pm AEST.
Aware , updated