To The Moon

The Australian sharemarket rose on Tuesday as a recovery in technology and uranium stocks gathered momentum after last week’s sell-off from concerns over massive spending on artificial intelligence.

The S&P/ASX 200 Index added 16.80 points, or 0.2%, to 8886.9. Nine of the 11 sectors were trading in the black, led by tech.

The Australian dollar was also higher as it consolidated around US70.80¢ after rising to a three-year high of US70.98¢, buoyed by a falling US currency and a global rally in equities.

Technology was the strongest sector as data centre operator NextDC jumped 3.4% to $13.78, Megaport 2.6% to $11.12 and Xero by 2.2% to $84.76. Uranium miners saw strong gains after heavy selling last week on fears that AI demand would not trigger a boom in nuclear power. Paladin rose 5.5% to $12.13 and Deep Yellow by 7.2% to $2.55.

Principal Asset Management chief global strategist Seema Shah said last week’s tech sell-off may have been overdone, as the sector continues to deliver earnings growth globally amid the AI backdrop.

“”The AI cycle appears to be entering a more mature phase: shifting from an environment that rewarded almost all tech exposures to one where AI advancement more clearly differentiates adaptive, resilient models from those that are easily automated,” Shah said.

Financials lagged on insurers as Steadfast dived 9.5% to $4.50, Insurance Australia Group 6.2% to $7.28, and QBE 3.4% to $19.69. The drop followed US insurance broker stocks falling on the launch of an AI tool from Insurify, which sparked fears about the industry facing disruption.

Elsewhere, Macquarie Group firmed 0.8% to $214.50 after it improved guidance for its commodities and global markets business now pointing to income growth rather than flat results.

Miners were mostly up as gold and silver prices retreated, while copper hovered near $US13,000 as investors looked to profit take. BHP rose 1.1% to $50.26, Rio Tinto 1.4% to $162.59 and Newmont 1.6% to $167.48

Treasury Wine Estates jumped 3.5% to $5.35 after its updated first-half EBITS guidance of $236 million exceeded prior guidance of $225 to $235 million. It also settled a long-running dispute in the US from Republic National Distribution Company shutting down its operations.

Electro Optic Systems surged 11.3% to $6.71 as it resumed trading following a report by short-seller Grizzly Research, calling the conclusions misleading, manipulative, and pejorative.

In corporate news, Childcare operator G8 Education plunged 20.6% to 50¢ after flagging a $350 million non-cash goodwill impairment, scrapping its final dividend and pausing its on-market share buyback amid weaker occupancy and rising costs.

DroneShield jumped 7.3% to $3.38 as the anti-drone technology provider appointed former Thales Australia and Knorr-Bremse executive Michael Powell as chief operating officer.

Amplitude Energy tumbled 22.1% to $2.50 after the junior gas player said its Elanora-1 exploration well off the Victorian coast had found water rather than gas.