US, China trade truce lifts market

THE Australian share market surged yesterday after a 90-day truce on tariffs between the US and China, with energy and mining stocks recording significant gains.

The benchmark ASX 200 index closed 104 points, or 1.8 per cent higher, at 5771.2 while the broader All Ordinaries also rose 1.8 per cent, or 107 points, to 5856.3.

The weekend’s trade breakthrough between US President Donald Trump and Chinese leader Xi Jinping at the G20 summit in Argentina provided a much-needed kickstart for markets across the region and lifted oil prices.

“The market has generally been just hungry for any sort of good news and any sign that things aren’t falling apart in the relationship between the US and China,” CommSec chief market analyst Steven Daghlian said.

The energy sector closed more than 4.5 per cent higher but Mr Daghlian said it was important to relate the bounce to recent doldrums.

The ASX lost ground for the last three consecutive months and is down about 5 per cent from where it started the year.

“Keep in mind that energy stocks have been some of the worst performers for an extended period of time,” he said.

“They’ve dropped about 20 per cent in the prior two months.”

Santos led gains for energy stocks, up 8.7 per cent to $6 after announcing gas from its third and final Bayu Undan well.