The Australian stock market closed higher, supported by gains in the materials sector, as the major miners try to take advantage of falling energy prices.
The benchmark S&P/ASX200 index ended Thursday at the highest points for the day, up 53.5 points or 0.81 percent to 6648.0. The broader All Ordinaries rose 52.6 points, or 0.78 percent, to 6836.9.
“Pretty good day today,” Australian market analyst Jessica Amir of Saxo Capital Markets told AAP.
“The market is quite optimistic, and I think the reason for that is two things: Australian bond yields are at their lowest level in a month and second, industrial metal prices are rising again.
“That’s because the oil price is now experiencing two very big down days, and one of the biggest costs for commodities companies is energy.”
BHP rose 3.1 percent to $38.94, Fortescue Metals gained 4.4 percent to $17.20 and Rio Tinto climbed 4.1 percent to $97.18. South32, supported by rising aluminum prices, added 4.8 percent to $3.70.
Goldminers Northern Star and Newcrest recovered somewhat after hitting multi-year lows on Wednesday as rising interest rates negatively impacted non-yielding assets. But Evolution fell again, falling 0.4 percent to $2.40.
As for interest rates, global markets processed the notes of the US Federal Reserve’s minutes from last month’s meeting, where the central bank raised interest rates by 75 basis points, the largest increase in 28 years.
A similar-sized gain could come later this month, according to the minutes, with a 50 basis point rise also on the table.
“Despite the reserve bank’s consistent aggressive stance, investors are questioning continued aggressive tightening policies due to a sharp decline in economic growth,” said Tina Teng, Asia-Pacific market analyst at CMC Markets.
In the financial sector, NAB held steady at $28.15, while the other three major banks gained ground.
ANZ rose 1.8 percent to $22.80, CBA rose 1.2 percent to $93.08 and Westpac rose 0.8 percent to $20.
Bendigo and Adelaide Bank rose 1.1 percent to $9.37 after agreeing to buy ANZ’s $715 million margin lending business.
Pinnacle Investments rose 7.6 percent to $8.18 after it was announced that 10 of its subsidiaries had earned $57.1 million in performance fees, of which Pinnacle’s share is $16.4 million.
The energy sector was flat as Brent crude fell below $100 for the first time since late April.
Santos fell 1.7 percent to $6.90, but Woodside rose 0.3 percent to $30.28 and Beach rose 1.9 percent to $1.64.
The industry was the biggest laggard, falling 0.8 percent, while Brambles fell 2.7 percent and Auckland Airport fell 1.9 percent.
In tech, Link Group rose 6.3 percent to $4.07 after Canada’s Dye & Durham raised its bid for the pension solutions provider to $4.57 a share.
Bubs Australia fell 9.0 percent to 55.5 cents, despite announcing the US Food and Drug Administration offers an opportunity to potentially continue imports of baby food to the United States even after shortages there eased.
Meanwhile, the Australian dollar remained close to a two-year low against its surging US counterpart. It bought 68.10 US cents, from 68.18 US cents at the end of Wednesday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed 53.5 points higher, or 0.8 percent, at 6648 on Thursday.
* The broader All Ordinaries gained 52.6 points, or 0.78 percent, to 6836.9.
An Australian dollar buys:
* 68.10 US cents, from 68.18 US cents at the end of Wednesday
* 92.53 Japanese yen, from 92.48 yen
* 66.73 Euro cents, from 66.41 cents
* 56.96 British pence, from 56.89 pence
* 110.27 NZ cents, from 110.33 cents