Australian shares staged a marginal recovery on Monday, encouraged by a sharp jump in Wall Street and as China’s stimulus plans lifted mining stock in particular, although valuations and trade war worries linger.
The S&P/ASX 200 index added 0.8% to finish at 7,854.10 points. The benchmark, which was confirmed on Thursday as being in correction, remains 8.8% below its February 14 all-time high.
China’s “special action plan” to boost consumption led to a 2.2% jump in Australian miners, which are reliant on China’s commodity demand. BHP, Rio Tinto and Fortescue advanced between 1.8% and 4.2%.
Moreover, a sharp recovery in Wall Street on Friday also encouraged investors to pick up Australian stocks battered over the past few weeks.
“Today’s market is experiencing gains due to the positive momentum from Friday’s rally in the United States,” said Junvum Kim, Asia Pacific senior sales trader at Saxo Markets.
The financials index snapped a nine-session losing streak to gain 0.9%. However, the Big Four banks have lost A$86 billion ($54.38 billion) in aggregate since February 14, as traders piled out of the richly valued sector.
“We think the stocks that benefited most from momentum in 2024 may also de-rate the most in 2025,” analysts at Macquarie said.
U.S. President Donald Trump’s policies are “headwinds for real consumer spending, which is the key driver of equity bear markets in the U.S. and Australia,” they added.
Among other sectors, energy stocks added 1.7%, while consumer staples ticked higher.
In stocks, Mineral Resources surged 11.6% after UBS upgraded its rating to “buy” from “sell”, saying the iron ore and lithium miner’s corporate governance issues had been largely addressed.
New Zealand’s benchmark S&P/NZX 50 index lost 0.6% to finish at 12,195.91 points. It is down about 7% from its December 30 peak.
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