ASX gains before US Fed decision; DroneShield, Electric Optic surge

The Australian sharemarket rose on Wednesday amid a pause in the oil price as investors shifted their attention away from the Iran war to the US Federal Reserve’s upcoming interest rate decision.

The S&P/ASX 200 Index climbed 26.30 points, or 0.3 per cent, at 8640.60, with 10 of the 11 sectors higher. After the Reserve Bank of Australia raised interest rates on Tuesday, the next catalyst for the market will be the outcome of the Fed’s board meeting overnight.

With US rates expected to remain on hold, the focus will be on the Fed’s update of its so-called dot plot that outlines where policymakers think interest rates are headed this year.

“What we are starting to see is investors looking beyond the immediate volatility and asking which exposures are structurally positioned to withstand a more uncertain geopolitical environment,” said VanEck senior portfolio manager Cameron McCormack.

On the ASX, rate-sensitive tech stocks were the strongest as NextDC climbed 3.6 per cent to $13.71. Xero rose by 2.3 per cent to $79.39 as Citi noted an acceleration in business formations and improving insolvency trends would be good for the software group.

Real estate companies also advanced, with Goodman Group up 2.1 per cent to $26.28 and Charter Hall rising by 0.7 per cent to $19.63.

Oil took a breather on Wednesday after recent gains, although the Strait of Hormuz remained largely shut. Brent was down 2.5 per cent to $US100.87 in the third week of the conflict.

Santos still gained 0.8 per cent to $7.77 while Woodside Energy rose by 0.1 per cent to $31.44 as it appointed Liz Westcott as chief executive, formalising her role after she had been serving as acting CEO since December.

Viva Energy advanced 3.9 per cent to $2.11 and Ampol 2.4 per cent to $31.52 as the Albanese government mulls changes to subsidies for Australia’s two remaining oil refineries.

DroneShield was the biggest riser on the ASX 200 as it increased 10.5 per cent to $4.44. Counter-drone group Electro Optic Solutions rebounded 9 per cent to $9.70 from a 17 per cent plunge on Tuesday after revealing CEO Andreas Schwer planned to sell the majority of his stake.

Stocks in focus

In company news, BHP added 0.7 per cent to $50.09 as the world’s largest mining company appointed Brandon Craig as its next CEO. Craig, who was raised in South Africa, has worked at BHP for more than two decades and will succeed Mike Henry on July 1.

Sims surged 9.9 per cent to $20.68 after forecasting full-year underlying earnings before interest and tax of between $350 million and $400 million, about 25 per cent above market expectations.

Humm rallied 6.1 per cent to 69.5¢ after the Takeovers Panel declared “unacceptable circumstances” over misleading statements by the group to investors on a proposed takeover by Credit Corp.

ARN Media fell 1.5 per cent to 33.5¢ after it terminated its contract with Kyle Sandilands and Quasar Media Services, ending the long-running The Kyle and Jackie O Show.

That concludes our coverage for today. We’ll be back tomorrow morning to bring you more live markets news and expert analysis.