Mining-led rally lifts shares
AUSTRALIAN shares closed higher yesterday led by the big miners following strong overnight leads from Wall Street as fears of a trade war between the US and China receded.
The ASX200 rose 41.8 points, or 0.72 per cent, to 5832.3, with all sectors in positive territory.
Tribeca Investment Partners deputy portfolio manager Jun Bei Liu said the strong rise in the materials sector came as investors returned to the major miners following weakness in some commodity prices and in the sector over the past two sessions.
“Investors may also be positioning for a rebound in the price of iron ore which has declined steadily but considering the three-month outlook, I would say that position is not great,” Ms Liu said.
Iron ore prices have fallen sharply in recent weeks, from above $US78 at the start of March to $US64.33 a tonne, according to Metal Bulletin data.
CBA commodities strategist Vivek Dhar said the rise in BHP Billiton and Rio Tinto reflected a “removal of pessimism” in iron ore and steel markets as the US and China engaged in talks that may avoid the imposition of damaging tariffs on each country’s exports.
There had also been signs of a reduction in steel rebar stockpiles in China, signalling an improvement in Chinese steel demand, Mr Dhar said.
BHP Billiton was up 1.4 per cent to $28.99, rival Rio Tinto gained 1.2 per cent to $74.16 and South 32 jumped 3.5 per cent to $3.28.