Australian shares reversed early losses to end higher on Thursday, hitting almost a nine-month high, helped by the mining index as iron ore prices rose after hopes of an economic recovery lifted demand in China.
The S&P/ASX 200 index closed 0.6% higher at 7,435.3 points. The benchmark had added 0.1% on Wednesday. The improved sentiment over reopening of Chinese borders has prevailed since the beginning of 2023, with the resource-rich bourse gaining in 10 of the last 15 days.
“The Chinese economy reopening is a massive tailwind for our big resources stocks, and Australia is of great importance to China in terms of our exports of commodities,” said Henry Jennings, a senior analyst and portfolio manager with Marcustoday Financial Newsletter.
Investors also cheered a weaker domestic jobs report for December, indicating a softer labour market and raising hopes that the Reserve Bank of Australia could pause its rate hikes.
“The weaker labour force suggests caution for the RBA. We still expect a 25 bps hike in February, to a 3.35% peak. But thereafter, the data is mounting a solid case for a pause in the hiking cycle,” analysts from UBS wrote in a note.
Australian shares post 8-1/2-month closing high on tech, healthcare boost
Miners led the gains, rising 1.1%, with sector majors Rio Tinto and Fortescue advancing 3.3% and 1.7%, respectively. In corporate news, BHP Group rose 1.2% after posting quarterly iron ore shipments that beat expectations, while adding that China is set to be a stabilizing force for commodities demand this year.
The financial index also traded 0.7% higher, with the “Big Four” banks firming between 0.1% and 1%. The energy index however performed poorly, losing about 0.7%, with Woodside Energy slipping 0.6%. New Zealand’s benchmark S&P/NZX 50 index fell 0.3% to finish the session at 11,885.6, marking its worst session since Dec 30.
The country’s prime minister Jacinda Ardern announced her resignation no later than early February and said she will not seek re-election.
Comments
Comments are closed for this article.