Wall Street records propel ASX higher, RBA follow-up comments ‘settle nerves’

Record highs on US markets propelled the ASX firmly into the green, while fresh comments on interest rates have settled nerves.

The Australian sharemarket was propelled higher by a positive lead from Wall Street, but managed to outperform it, while follow up comments to yesterday’s rates decision appear to have “settled nerves”.

The benchmark S&P/ASX200 index rallied 0.93 per cent to 7392.7, while the All Ordinaries Index strengthened 0.87 per cent to 7713.

CommSec analyst Steven Daghlian said the local bourse outperformed US markets, which hit fresh record highs overnight, with the Dow Jones Industrial Average closing above 36,000 for the first time, up 0.4 per cent.

After the Reserve Bank of Australia held its monthly board meeting on Tuesday, keeping the cash rate at a historic-low 0.1 per cent, governor Philip Lowe said he strongly disagreed with current market pricing for hikes in 2022.

“He basically said hikes next year, while not impossible, are extremely unlikely,” Mr Daghlian said.

“But he did say it’s possible for rates to rise in 2023, so it seems to have settled nerves, to an extent.”

AMP Capital chief economist Shane Oliver remains convinced both Australian and US central banks will “start raising rates later next year”.

OMG chief executive Ivan Tchourilov noted reactions to the RBA meeting had been mixed, with the central bank “refusing to match the hawkish outlook of other major financial institutions”, and credited the ASX rise to the upbeat US lead.

“There weren’t a lot of losers today – even iron ore miners were in the green, despite iron ore prices crashing overnight,” Mr Tchourilov said.

Mr Daghlian said the iron ore price had fallen for five straight days, back below $US100 per tonne, and had tumbled about 20 per cent in a little over a week.

“This is on some fresh restrictions on steel production in China in a bid to control pollution ahead of next year’s Beijing Olympics,” he said.

Rio Tinto lifted 1.17 per cent to $89.70, BHP added 1.07 per cent to $35.94 and Fortescue advanced 3.08 per cent to $14.38.

A particularly strong performer was lithium miner Orocobre Ltd, which surged 6.7 per cent to $9.70.

The banks gained ground after three straight trading days of losses.

Commonwealth Bank revealed it will become Australia’s first bank to offer customers the ability to buy, sell and hold cryptocurrency assets, including Bitcoin and Ethereum, directly through its CommBank app.

The pilot will start in coming weeks and CBA intends to progressively rollout more features next year.

CBA put on 1.17 per cent to $107, National Australia Bank rose 1.35 per cent to $28.58, Westpac inched two cents higher to $23.15 and ANZ gained 2.26 per cent to $28.47.

Investors applauded AMP announcing it had completed its exit from life insurance after more than 170 years in the business, selling its 19.13 per cent interest in Resolution Life Australasia for $524m.

The group sold the majority of the business last year for $3bn and says the divestment of the remaining stake provides balance sheet flexibility ahead of the planned demerger of its private markets division, which holds real estate and infrastructure investments.

“It’s a welcome capital injection for the wealth manager, if their new fancy building in Sydney CBD is anything to go by,” Mr Tchourilov said.

“AMP’s streamlining plans hit a hitch when the company was rinsed at the 2019 Hayne Royal Commission – it seems they are now starting to find their feet again.

“They’re focusing on banking and wealth management and divesting from the rest, usually maintaining a stake in the divested entity.”

AMP shares leapt 9.3 per cent to $1.17.

Telstra renewed its contract with the Department of Defence, clinching a five-year deal worth more than $1bn, but its shares didn’t budge from $3.90.

Packing giant Amcor firmed 0.75 per cent to $16.11 after delivering a solid first quarter result and reaffirming its full-year outlook, despite sales in some parts of the business being hit by raw material shortages.

Insurance Australia Group continued to backtrack, losing 1.11 per cent to $4.45 a day after downgrading its full-year guidance due to higher estimates for hail and severe storm damage claims, which sent its shares tumbling more than 7 per cent on Tuesday.

“Four brokers have reduced their expectations for its shares over the next 12 months,” Mr Daghlian said.

Domino’s Pizza held its annual general meeting, announcing its commitment to net zero emissions by 2050, flagging its plan to operate more than 6650 stores by 2030 – up from 3169 currently – and also warning it expects to be faced with higher food and energy costs next year.

Domino’s shares eased 0.13 per cent to $142.30.

In economic news, building approvals fell by 4.3 per cent in September, but were up 12.8 per cent on a year ago.

Approvals to build detached houses dropped 16.1 per cent in September – which CommSec senior economist Ryan Felsman said was the biggest monthly decline in 21 years – but higher-density apartment approvals lifted 17.4 per cent.

“Building construction is expected to remain elevated over the next 12 months due to strong homebuyer demand,” Mr Felsman said.

“Builders and their contractors are under pressure to deliver projects on-time and on-budget as they work through a huge pipeline of residential, commercial and infrastructure-related construction work.

“Already construction companies are experiencing skilled trades labour shortages and rising building materials costs due to supply-chain disruptions.”

The Aussie dollar was buying 74.32 US cents, 54.53 British pence and 64.15 Euro cents in afternoon trade.

Originally published as Australian sharemarket surges into the green, notching up gains across the board

Source link


Miner’s sex shame: Fortescue joins BHP, Rio Tinto in FIFO booze crackdown

Fortescue has joined BHP and Rio Tinto in restricting alcohol at mining camps as ‘disturbing’ allegations of sexual misconduct in the FIFO workforce surge.

Iron ore giant Fortescue Metals Group is cracking down on boozy mine site culture as it responds to “disturbing” claims of sexual assault and harassment in its workforce.

Chief executive Elizabeth Gaines on Wednesday told a West Australian parliamentary inquiry, which was sparked by shocking headlines of sexual misconduct in the fly-in fly-out sector, that the company’s new drinking limit came after a broad review that included surveying almost 2000 employees.

It follows similar moves by BHP and Rio Tinto.

“We have also reviewed our alcohol service limits and will shortly introduce a limit of no more than four mid-strength alcoholic drinks in a 24 hour period,” Ms Gaines said.

She said the circumstances of the stories that led to the inquiry were “deeply distressing and disturbing”, and personally apologised to any team members who had experienced sexual harassment at the miner’s operations.

Ms Gaines said the company was committed to tackling the problem, including encouraging reporting and taking action against perpetrators.

Earlier, Rio Tinto’s iron ore chief Simon Trott said he was “sickened” by the allegations, saying it was an “uncomfortable truth” that such misconduct happened in the sector at construction sites, mines and accommodation villages.

“I’m appalled and sickened by the stories I’ve heard, the things that I have read about, people’s experience in our business and in the industry,” Mr Trott said.

“We’re determined to change and ensure our workforce is safe from sexual harassment, racism, bullying and psychosocial harm.

“To anyone who has experienced any form of sexual harassment or sexual assault within our business, I’m sorry, I’m deeply sorry, and I stand before the inquiry today to commit to doing better to eliminate these behaviours from all areas of our business.”

Rio Tinto informed the inquiry in August that since January 1 last year, it had substantiated one case of sexual assault and 29 cases of sexual harassment within its FIFO operations and was investigating one allegation of sexual assault and 14 reports of sexual harassment.

Echoing others in the sector, Mr Trott said the problem was under-reported, but Rio Tinto’s anonymous “myVoice” whistleblower program sought to draw out claims.

Rio Tinto general manager of human resources Laura Thomas said there had been a surge in allegations lodged with the miner between 2020 and 2021 of about 120 per cent, which was encouraging.

She said most coincided with the release and rebrand of the myVoice program, and bystanders were being prompted to speak up.

Mr Trott said about 90 per cent of substantiated cases resulted in dismissal or disciplinary action, including a written warning.

Ms Thomas elaborated, telling the inquiry that amounted to 30 people in the past year, half of whom had been terminated.

“Keeping in mind this year we’ve still got a substantial number of cases under investigation,” she added.

The executives were asked about the process of “getting your shirt” – graduating from a labour hire or contractor role to a direct job with a miner – which appeared to be a key time for sexual harassment.

Inquiry chair Libby Mettam was referring to a shocking written submission by married mother of two Astacia Stevens, a Rio Tinto worker, who told the inquiry she was undertaking a diploma in counselling with a view to leaving the mining industry because of the sexual harassment she had endured.

When she started out as a cleaner, a certain colleague would touch her “inappropriately at almost every occasion that I was in his presence”, she alleged.

“For example, he would frequently grab my bum, putting his fat gut into the small of my back … he would try to ‘ride me’, he would laugh when he did it, and he did it often in front of others,” Ms Stevens wrote.

“He would often grab my hips from behind and pretend to sexually penetrate … he would make crude and sexual comments in front of other guys when I would need to pick something up off the floor.”

Knowing she wanted a job as haul truck operator, he demanded “special favours” and said “I knew where his room was”, she alleged.

The man had the authority to advise the supervisor whether she was appropriate for the job but refused to sign her over “unless I had sex with him”.

“I refused to have sex with him, so I therefore continued to do the same job as a contractor,” Ms Stevens wrote.

Mr Trott said power imbalances in Rio Tinto’s workforce “certainly create the environment that can lead to the incidents”.

“We’re certainly looking at that and understanding that in a way that we can put in greater preventions at those power imbalance points,” he said.

Mr Trott also commented on the idea of creating a blacklist of perpetrators in the sector, given some who were marched from their job as a result simply popped up ‘down the road’.

He said Rio Tinto would support “some form of register” but there would be complexities.

Ms Mettam said the Equal Opportunities Commission had raised the right to a fair process and encouraged a stronger referral process.

Ms Gaines said she also had concerns around a potential list.

“Who would regulate that, how long does somebody stay on the list, what happens if there’s a mistake and they appear on the list through error? There’s a whole range of issues,” she said.

“Our preference is to adopt our approach, which is to make sure we’re recruiting in accordance with our recruitment practices.”

Originally published as Fortescue joins BHP, Rio Tinto in booze crackdown amid flood of sexual assault, harassment allegations in FIFO workforce

Source link