Australian shares rebound as miners, banks lead broad-based gains

Australian shares rebounded from five-month lows on Thursday as upbeat local earnings and optimism following Nvidia’s stronger-than-expected results drew investors back into an oversold market.

The S&P/ASX 200 index closed 1.2% higher at 8,552.70 points, marking its strongest session since mid-July.

The benchmark’s relative strength index (RSI) dipped below 30 for the first time since April on Monday, a threshold market participants consider indicative of an oversold market, although it climbed back above 30 by Thursday.

Today’s rebound stems primarily from the market’s oversold position, Jessica Amir, market strategist at moomoo said.

“We are getting better than expected company results come through, and risk appetite is back because of NVIDIA delivering better than expected results and putting cold water on fears of an AI bubble” Amir said.

After a week-long selling bout driven by concerns over valuation premiums and earnings prospects, the big-four banks bounced back on the day, lifting the financials 1.2% higher.

Commonwealth Bank of Australia advanced 1.1% as investors bought back into the country’s largest lender whose shares had fallen 15% from an early November peak on warnings of margin pressure and a rotation out of overpriced stocks.

Westpac, ANZ, and NAB also added between 0.9% and 1.4%, while Macquarie gained 2.4%.

Basic materials sector posted its strongest performance in nearly two months, ending 2.6% higher as strength in iron ore and copper prices lifted heavyweight miners.

Rio Tinto rose 2.2%, BHP added 1.9% and Fortescue lifted 4.2%.

Gold miners extended gains to add 2.7% as safe haven flows ahead of key US jobs data buoyed bullion prices.

Pilbara Minerals and Mineral Resources advanced 5.3% and 4.5%, respectively, supported by a rebound in lithium prices from recent lows.

Technology stocks, which fell in six of the last seven sessions, climbed 2.4%, driven by Block’s local stocks after it projected upbeat annual growth.

Stronger-than-expected results from AI bellwether Nvidia also eased valuation concerns.

Block jumped 10.9%, while Wisetech and Xero gained 2.1% and 1.6%, respectively.

New Zealand’s benchmark S&P/NZX 50 index closed 0.8% higher at 13,439.40 points.