The Australian sharemarket rebounded from six-month lows on Monday, rising 1.3% as traders grew more confident that the United States Federal Reserve may still deliver an interest rate cut next month.
The improved tone followed comments from New York Federal Reserve President John Williams, a close ally of Fed Chair Jerome Powell, who said there was room to ease borrowing costs “in the near term”.
Market pricing shifted accordingly, with traders now assigning roughly a 70% chance of a December rate cut, up from 39% last week, according to the CME Group FedWatch Tool.
The S&P/ASX 200 advanced 108.6 points or 1.3% to 8,525.1, with ten of 11 sectors ending higher.
The Information Technology sector led the market advance, with Xero up 0.6%, Wisetech Global adding 2% and TechnologyOne up 1.7%.
The Industrials sector boosted after Qube surged 19.4% on news that Macquarie Asset Management had lobbed a $5.20-per-share takeover proposal valuing the logistics group at A$11.6 billion.
Reece also climbed more than 12% after Macquarie analysts upgraded the plumbing supplies company to neutral and raised their price target to $11 from $10.10, citing stronger-than-expected revenue trends - particularly in the United States, where the firm is expanding its store network.
Healthcare stocks attracted inflows, with Monash IVF rocketing 44.3% after rejecting an unsolicited 80-cent-per-share takeover proposal from a consortium led by Genesis Capital and Washington H. Soul Pattinson.
Pro Medicus added 3.5% after signing three new U.S. contracts worth at least $29 million to expand the rollout of its cloud-based imaging platform across several healthcare segments.
CSL added 2.3%, Fisher & Paykel Healthcare gained 2.1%, Cochlear added 2.3%, and ResMed rose 2.2%.
The Materials sector also closed higher, with Rio Tinto adding 1.1% and Fortescue gaining 1.9%.
BHP added 0.6% after confirming it had abandoned a renewed attempt to acquire UK-listed Anglo American, saying it is no longer considering a deal following preliminary talks.
On the bond markets, 10-year rates eased 0.3% to 4.449%. and 2-year yields were up 0.3% to 3.683%.
