The Australian share market burst out of the gates after a strong lead from Wall Street and held onto most of its gains by the close, buoyed by the banking sector and mining stocks on higher commodity prices.
The benchmark S&P/ASX200 index was up 33.3 points, or 0.58 per cent, at 5758.4 on Thursday, while the broader All Ordinaries rose 0.61 per cent.
The ASX climbed as much as 0.94 per cent earlier in the day after the S&P 500, Dow Jones and Nasdaq each advanced 2.3 per cent or more overnight, which CommSec chief market analyst Steven Daghlian said was driven by comments made by US Federal Reserve Chair Jerome Powell.
“The market looks for any sort of hints as to what might happen to interest rates, and the most interest were comments suggesting there could be fewer rate hikes in the next year,” he told AAP.
“That seemed to push the US dollar lower and helped commodity prices lift which in turn rubs off on our market.”
The market was then choppy throughout the day and Mr Daghlian said this reflected buyers being cautious ahead of the G20 summit and the critical trade talks between the US and China.
Higher iron ore and copper prices continued to support the materials sector that – aside from the smaller tech sector – was the biggest riser.
BHP climbed 1.2 per cent to $30.98, South32 gained 1.6 per cent to $3.14, and Fortescue Metals continued its strong recent run with a 2.3 per cent rise to $4.03.
Rio Tinto was 1.7 per cent higher at $73.25 after finally giving the green light to the $3.5 billion Kookaideri mine in WA.
Financials had fallen back through the day’s trading but still recorded a sector gain of 0.5 per cent at close, with ANZ the strongest of the big four, rising 0.7 per cent higher to $27.15, and NAB the weakest, unchanged at $24.91.
Macquarie Group was 1.5 per cent higher at $116.81.
Consumer staples were higher despite Coles being one of the biggest drags on the share market, losing 2.4 per cent to $12.39, as it continues to adjust to trading as its own separate entity.
Elsewhere, Bingo’s shares closed 5.3 per cent lower after the ACCC raised concerns about the possible anti-competitive effect of the waste management company’s proposed $577.5 million acquisition of Dial-a-Dump.
The Australian dollar strengthened against the US dollar as the interpretation of Mr Powell’s comments on interest rates weakened his nation’s currency.
The Aussie was buying 73.16 US cents at 1630 AEDT, up from 72.33 cents on Wednesday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed up 33.3 points, or 0.58 per cent, at 5758.4
* The All Ordinaries was up 35.6 points, or 0.61 per cent, at 5835.7
* At 1630 AEDT, the SPI200 futures index was up 20 points, or 0.35 per cent, at 5745
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 73.16 US cents, from 72.33 US cents cents on Wednesday
* 82.87 Japanese yen, from 82.36
* 64.24 euro cents, from 64.02
* 56.96 British pence, from 56.74
* 106.57 NZ cents, from 106.44
The spot price of gold in Sydney at 1630 AEDT was $US1224.66 per fine ounce, from $US1214.42 on Wednesday.