SYDNEY, AAP – Banks and biotechnology giant CSL helped the ASX to its biggest gain in six weeks despite the inflationary ramifications of war in Ukraine and a rate rise tipped for the US this week.
A broad-based rally on Monday helped the indices improve by more than one per cent and better most Asian markets.
Most of the major banks improved by two per cent and CSL rose by the same measure as their respective share categories fared best.
VanEck head of investments Russel Chesler said since Russia invaded Ukraine, global investors were increasingly buying Australian ‘value’ shares. These were usually the big banks and miners.
Boycotts of Russian oil and commodities have pushed inflation higher, which was key to the choice of value shares.
Mr Chesler said Australian companies that could maintain or raise prices without losing customers would be the winners.
Growth shares would suffer as interest rates rise, Mr Chesler said. These are usually technology ones.
The benchmark S&P/ASX200 index closed up 85.8 points, or 1.21 per cent, to 7149.4 points.
The index is still down about 500 points from its record high in August last year.
The All Ordinaries index closed higher by 82.9 points, or 1.13 per cent, to 7422.2 points.
The only share category lower was materials, which fell by less than half a per cent.
In company news, agribusiness Elders has flagged it would beat full-year earnings forecasts by at least 20 per cent.
The company’s retail and wholesale operations had higher sales and favourable seasonal conditions, while the agency and real estate arms were also doing well.
Elders was up 11 per cent to $13.32.
Ampol will sell its New Zealand Gull fuel business for $475 million to investment manager Allegro.
Ampol agreed to sell the business to avoid competition conflicts that may arise from its planned takeover of Kiwi business Z Energy. The funds from the Gull sale would be used to buy Z Energy.
Ampol was up two per cent to $28.87.
Miner IGO’s proposed takeover of Western Areas is being delayed while the latter considers significant movements in nickel prices.
While Western Areas recommended investors accept the $1 billion offer, the board is considering the implications of huge price increases for nickel on the London Metals Exchange. Investors are due to vote on the bid in May.
IGO was down almost two per cent to $12.49. Western Areas gained less than one per cent to $3.51.
Among the mining giants, Fortescue fell hardest and lost one per cent to $18.04.
BHP and Rio Tinto each lost less than one per cent to $47.36 and $111.12 respectively.
On Tuesday, the Reserve Bank will publish the minutes of its March meeting.
Investors will scrutinise this for clues as to whether the bank may raise rates this year.
The ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – is also due.
The Australian dollar was buying 72.43 US cents at 1705 AEDT, lower than 73.32 US cents at Friday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 85.8 points, or 1.21 per cent, to 7149.4 points on Monday.
* The All Ordinaries index closed higher by 82.9 points, or 1.13 per cent, to 7422.2 points.
* At 1705 AEDT, the SPI200 futures index was even at 7148 points.
One Australian dollar buys:
* 72.43 US cents, from 73.32 cents on Friday
* 85.28 Japanese yen, from 85.70 yen
* 66.36 Euro cents, from 66.78 cents
* 55.62 British pence, from 56.16 pence
* 106.76 NZ cents, from 107.20 cents.