ASX gains momentum
Mining sector pushes sharemarket higher
THE Australian sharemarket has gained more than 1 per cent for the second straight day, with miners shining after iron ore and gold prices jumped.
The S&P/ASX200 benchmark index closed yesterday up 55.7 points, or 1.03 per cent, at 5460.5 points, while the All Ordinaries index was up 64.7 points, or 1.18 per cent higher, at 5557.5.
“The ASX200 has burst out of the gate to begin the new trading week,” IG Markets analyst Kyle Rodda said in a note. “The index remains trading within its broader range, but … it’s as much of a buyer’s market today as it has been at any point in the past fortnight.”
A key question would be whether the ASX200 now had the upwards momentum to challenge its April highs this week of around the 5500 mark, Mr Rodda said.
HG Hiscock Australian equities portfolio manager Hamish Tadgell attributed the mining sector’s gains to iron ore futures rising as much as US$93 a tonne as the coronavirus spread in the mining-rich region of Para, Brazil.
“I think that along with the fact that the (Chinese) National People’s Congress is starting later this week, and you might see some stimulus plans come out as a result of that meeting,” Mr Tadgell said.
Any boost to China’s economy, and in particular its manufacturing sector, would of course boost Australia’s iron ore miners that export the commodity to China. Fortescue Metals gained 5.8 per cent to an all-time high of $13.28, BHP gained 4.5 per cent to a two-month high of $33.10 and Rio Tinto soared 5.8 per cent to a one-month high of $90.30.
Goldminers also rallied as the price of the yellow metal climbed to a nearly eight-year high of over $US1760 an ounce, after Federal Reserve chairman Jerome Powell said in an interview that the US central bank was not out of ammunition “by a long shot” and could do more to help the world’s largest economy.
Newcrest gained 6.7 per cent, Evolution Mining rose 5.9 per cent and Saracen gained 11.3 per cent to an alltime high of $5.62 – which Mr Tadgell attributed in part to talk the goldminer could join the ASX100. Energy stocks also had a good day, collectively gaining 2.8 per cent.