ASX gains after new records on Wall Street, Elon Musk says Tesla would ‘die’ if he wasn’t CEO

Australian shares have made a strong start to the day after more record highs on Wall Street and lower interest rates in China. 

Miners led the rises on the Australian share market. 

At 10:30am AEST, the All Ordinaries index increased 0.5 per cent to 7,645.

The ASX 200 index was also up by half a percentage point with nearly all sectors making tracks.

Aside from miners, banks, consumer stocks and industrial firms helped to drive the gains. 

Aerial mapping firm Nearmap (+15.9pc) did the best on the benchmark index after its preliminary results for 2021 were better than forecast.

It was followed by fertiliser maker Incitec Pivot (+6.2pc) and lithium miner Orocobre (+5pc).

Incitec Pivot said it would restructure its manufacturing model from global to regional.

Platinum Asset Management fell (-5.7pc) after seeing an outflow of funds of $167 million in June. 

Also going down were Crown Resorts (-1.4pc) and building materials supplier CSR (1.3pc).

Shares in Berkeley Energia plunged by half after a Spanish regulator blocked its planned uranium mine.

The Australian dollar gained 0.1 per cent to around 74.83 US cents.

APRA tells banks to prepare for negative interest rates 

The banking regulator has told financial institutions to have a plan by the end of April next year to deal with the prospect of zero or negative interest rates.

Negative interest rates occur when depositors are charged a fee to park their money in a bank and borrowers receive interest for borrowing.

The move is encourage businesses and individuals to invest, lend or spend rather than keep their money in the bank. 

The Reserve Bank had said repeatedly that a negative cash rate was highly unlikely in Australia.

However, the Australian Prudential Regulation Authority said the possibility of negative interest rates in the future could not be ruled out.

“It is possible that other interest rates determined in the financial markets could fall to zero or below zero at any time,” APRA said.

It said that for some financial institutions, negative or zero interest rates would pose “operational challenges”.

“Insufficient preparation for the possibility of zero and negative interest rates could therefore have an adverse impact on an ADI, its customers and the markets in which it operates,” APRA said.

All the big banks rose in early trade.

Elon Musk accused of misleading investors

US stocks have reached new record highs boosted by electric car maker Tesla, despite investors accusing Elon Musk of misleading them. 

Tesla shares rose 4.4 per cent as founder Elon Musk appeared in court and insisted he did not control the electric car maker.

He was on the stand defending the company’s 2016 acquisition of solar panel firm SolarCity, which was founded by his cousins. 

The legal case was brought by union pension funds and investment managers. 

They accuse Mr Musk of depleting Telsa’s assets with the $US2.6 billion ($3.5 billion) stock deal for SolarCity.

The investors want the court to order Mr Musk, one of the world’s richest people, to repay Tesla the amount it spent on the deal. 

Mr Musk owned a 22 per cent stake in the solar panel firm at the time and investors alleged the deal was aimed at bailing out his stake in the company. 

Mr Musk told the court also he did not enjoy being the boss of Tesla. 

Musk calls lawyer a ‘bad human being’

Mr Musk also called Randall Baron, the attorney for the shareholders, a “bad human being”.

Mr Baron asked if the board vetted the ‘Technoking’ title Mr Musk gave himself in March.

“I think I’m funny.” 

Mr Musk is accused of dominating board discussions over the deal, pushing Tesla to pay more for SolarCity and misleading shareholders. 

The Tesla boss said he was not part of the board committee that negotiated the deal. 

Tesla directors settled allegations from the same lawsuit last year for $US60 million ($80 million).

Wall Street record highs

Wall Street’s main indexes closed at the highest on record amid the start of the second-quarter profit reporting season.

Financial stocks, communication services and real estate boosted the S&P 500 index. 

The S&P 500 banks index climbed ahead of quarterly earnings reports this week from major banks, including Goldman Sachs and JP Morgan. 

Investors will closely watch quarterly reports for early clues on the how long the US economic recovery may last.

The S&P 500 has rallied about 17 per cent so far this year.

with some investors questioning how long Wall Street’s rally may last and concerned about a potential downturn.

 “Earnings season is going to be warmly greeted as an opportunity for existing biases to be confirmed,” warned Mike Zigmont from Harvest Volatility Management in New York.

Federal Reserve chair Jerome Powell is due to appear before Congress on Wednesday and Thursday for his views on inflation.

The Dow Jones Industrial Average rose nearly 0.4 per cent to end at 34,996, while the S&P 500 also gained almost 0.4 per cent to 4,385.

The Nasdaq Composite climbed 0.2 per cent to 14,733.

All three indexes closed at their highest levels ever.

Virgin Galactic Holdings tumbled 17.3 per cent after the space tourism company said it may sell up to $US500 million worth of shares, a day after the company completed its first fully crewed test flight into space with billionaire founder Sir Richard Branson on board. 

Brent crude fell 0.5 per cent to $US75.20 a barrel.

Spot gold fell 0.1 per cent to $US1805.87 an ounce. 

ABC/Reuters