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Over in the US on Tuesday, Wall Street closed lower across the major averages as fresh economic data and higher bond yields weighed on investor sentiment. The Dow Jones fell 0.42%, the Nasdaq lost 1.9% and the S&P500 ended the day down 1.11%. Fresh data from the Institute for Supply Management revealed faster-than-expected growth in the US services sector in December which raises investor concerns of inflation remaining sticky in the world’s largest economy.

In Europe overnight, markets mostly extended their recent rally to close higher on Tuesday as investors digested inflation data and key corporate results. The STOXX 600 added 0.32%, Germany’s DAX rose 0.62%, the French CAC lifted 0.6% and, in the UK, the FTSE 100 ended the day down just 0.05%. Annual inflation in the eurozone rose to 2.4% in December which is up from the 2.2% rise in November but was in line with economists’ expectations.

Across the APAC region on Tuesday, markets closed higher led by Japan’s Nikkei as a global tech rally boosted the growth sectors across markets in the region. Japan’s Nikkei rose 1.97% on Tuesday, South Korea’s Kospi Index advanced 0.14%, and China’s CSI index rose 0.72%.

The local market extended its rally into Tuesday with a gain of 0.33% on the back of a strong start to the week for US and European markets on Monday. Chip and tech stocks led the charge yet again early in the week as investor optimism for earnings growth potential continues to drive tailwinds for the high growth tech sector.

Once again yesterday, the mining giants came under pressure amid concerns over demand outlook for key commodities following further weak economic data out of China over recent weeks including manufacturing PMI, retail sales and trade balance data. Fortescue lost 4.4% on Tuesday, while BHP declined 0.7% and Rio ended the day down 0.7%.

Meanwhile, IDP Education rose almost 4% yesterday after Macquarie upgraded the stock to ‘outperform’ citing near-term consensus downgrades and the company’s 1H25 results as potential investing opportunities.

4D Medical shares rocketed over 16% yesterday after receiving FDA clearance for its AI-driven IQ-UIP lung diagnostic tool, designed to improve the diagnosis of Usual Interstitial Pneumonia, a key marker for Interstitial Pulmonary Fibrosis (IPF). The global IPF treatment market, valued at $4.01bn in 2024, is expected to grow to over $7.8bn in the next decade.

Elsewhere in the healthcare space, we saw Opthea soar over 7.5% after the clinical-stage biopharmaceutical company announced the publication of its Phase 1b trial of its lead product candidate for combination therapy in diabetic macular edema.

What to watch today:

• Ahead of the midweek trading session here in Australia the SPI futures are anticipating the ASX will open the day down 0.19% tracking Wall Street’s losses overnight.
• On the commodities front this morning oil has recovered from the recent dip to trade 0.97% higher at US$74.28/barrel, gold is up 0.63% at US$2651/ounce and iron ore is flat at US$99.44/tonne.
• The Aussie dollar has slightly weakened against the greenback to buy 62.41 US cents, 98.45 Japanese Yen, 50.01 British Pence and 1 New Zealand dollar and 11 cents.

Trading Ideas:

• Trading Central has identified a bearish signal on IRESS (ASX:IRE) following the formation of a pattern over a period of 18-days which is roughly the same amount of time the share price may fall from the close of $9.22 to the range of $8.15 to $8.35 according to standard principles of technical analysis.
• And Trading Central has identified a bullish signal on Jumbo Interactive (ASX:JIN) following the formation of a pattern over a period of 39-days which is roughly the same amount of time the share price may rise from the close of $14.12 to the range of $15.70 to $16.10 according to standard principles of technical analysis.