Strong commodity prices proved the backbone for the Australian sharemarket on Thursday as mining titan BHP set the pace and dragged everyone else up with it.
The benchmark ASX 200 finished 40.9 points, or 0.7 per cent higher, at 6042.2 as improved prices for iron ore, gold and oil fuelled a solid day’s trade across the materials and energy sectors.
The miners were strong on Thursday.
BHP rose 4.9 per cent to $39.82, finishing at its highest price since January 24.
An ex-dividend Rio Tinto added 1.5 per cent to $105.50 and Fortescue Metals set a new high close of $18.57 in climbing 1.5 per cent for the day.
A strong session for the miners came after spot gold touched a new record high of $US2055 an ounce and iron ore continued its push towards $US120 per tonne.
“Iron ore has been phenomenal and continues to rise,” Burman Investments portfolio manager Julia Lee said.
“It will be interesting to see what will happen as Brazil comes back online but because the demand side is so strong I think prices will remain elevated.”
Oil prices also improved, helping a bruised energy sector rise by a collective 1.9 per cent.
“Remember too we are seeing a lot of money coming into global markets, a lot of US stimulus, which tends to support hard commodities because they’re all measured in US dollars,” Ms Lee said.
“So a weakening US dollar is also providing support here.”
Wall Street provided a positive lead on Thursday as hopes of a new stimulus deal increased, though conflicting US economic indicators left investors scratching their heads.
US ADP Employment severely underperformed, while US Services PMI rose, even as US Non-Manufacturing Employment eased.
The market momentum in New York wasn’t a universal boon for Asian stocks, with Korea and Australia the major beneficiaries in a mixed session across the region.
The ASX eased from early heights after the daily coronavirus updates in NSW and Victoria and appeared content to meander along in a narrow range through to the close.
Health stocks, property firms, and consumer staples dragged, while the influential financial sector eked out meagre gains. ANZ was the best of the bug banks, up 1 per cent to $17.64.
A number of consumer discretionaries stocks surprised - including beaten-down travel firms.
Corporate Travel rose 6.9 per cent to $9.15, Webjet climbed 6 per cent to $3.01, and Flight Centre added 1.5 per cent to $10.
Retailer Harvey Norman jumped 7.5 per cent to $4.03 and Nick Scali jumped 14.6 per cent to $8.80 after flagging a bumper half-year ahead.
Super Retail, Premier Investments, JB Hi-Fi each rose by between 2.2 per cent and 2.5 per cent.