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Updated December 29th, 2023 at 18:27 IST

Australian shares hit 20-month high led by miners, banks

Mining giants such as BHP Group, Rio Tinto, and Fortescue not only contributed to the rally but also reached record highs in their closing figures.

Business Desk
Australia
The Sydney Opera House. | Image:Shutterstock
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Australian shares surged to highest level in 20 months on Thursday. The S&P/ASX 200 index climbed 0.7 per cent to hit 7,614.30, a closing peak not seen since late April 2022. This upward trajectory, following a 0.8 per cent gain on Wednesday, is attributed to growing expectations that major central banks will initiate interest rate cuts early in the coming year.

The ascent of the Australian benchmark was notably steered by the robust performance of mining and banking stocks. Heavyweight miners, in particular, saw a 1.1 per cent rise, buoyed by strong iron ore and base metal prices. Mining giants such as BHP Group, Rio Tinto, and Fortescue not only contributed to the rally but also reached record highs in their closing figures.

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Simultaneously, rate-sensitive financials closed approximately 0.8 per cent higher, achieving their peak levels since mid-February. The 'big four' banks, including Commonwealth Bank of Australia, experienced gains ranging from 0.5 per cent to 0.1 per cent, with the latter touching its all-time high.

Gold stocks exhibited a notable surge, jumping nearly 1.1 per cent as bullion prices reached a three-week high due to a weaker dollar. Sector heavyweight Northern Star Resources and ASX-listed shares of Newmont Corp both saw significant gains, contributing to the remarkable performance of the gold sub-index, which is set to record its best year since 2016 with a 27 per cent rise.

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Information technology firms continued their positive trend, rising for the third consecutive day with a 1 per cent gain, following the overnight rally of their Wall Street counterparts. Healthcare stocks and energy stocks also contributed to the overall buoyancy, rising by 0.5 per cent and 0.4 per cent, respectively.

Investor sentiment appears to be shifting positively, with Brad Smoling, Managing Director at Smoling Stockbroking, noting that many investors who adopted defensive strategies earlier in 2023 are now turning optimistic. This shift, coupled with hopes of monetary loosening, has contributed to the robust performance of global markets and bodes well for the Australian benchmark.

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Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index mirrored the positive trend, gaining 0.8 per cent to finish the session at 11,768.68 points.

As the year draws to a close, Australian shares remain on track to end 2023 with notable gains, reflecting the resilience and optimism in the market amidst evolving economic dynamics.

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(With Reuters inputs)

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Published December 28th, 2023 at 11:31 IST

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