Australian shares have advanced for a fourth straight session on Wednesday, led by mining stocks as iron ore prices surged on hopes of China easing its COVID curbs, while NAB slumped on a dire lending outlook.
Key points:
- The ASX 200 has lost more than 6 per cent since the year began
- Overnight, Wall Street closed up after a volatile session
- The pan-European STOXX 600 index rose 0.8 per cent
The ASX 200 was up 46 points or 0.7 per cent to 7,005 at 11:53am AEDT.
At the same time, the Australian dollar was flat, at 64.57 US cents.
Heavyweight miners were the top boosts to the benchmark, jumping 2.5 per cent on higher iron ore prices.
Dalian iron ore climbed to its highest in two weeks on Tuesday, supported by persistent hopes that China would ease its stringent curbs, despite worries about a surge in new coronavirus cases in some cities.
Shares of Rio Tinto, BHP Group and Fortescue Metals rose between 1.9 per cent and 2.5 per cent.
Financials was flat, with three of the big four banks advancing as much as 0.5 per cent.
NAB slumped 2.3 per cent after it warned of slowing lending volume on impact from higher interest rates. The bank’s stock was among top drags on the benchmark.
Among losers, energy stocks dropped about 0.1 per cent as oil prices fell on choppy trading over demand worries from top crude importer China.
However, index majors Woodside Energy and Santos gained around 0.6 per cent each.
Shares of Whitehaven Coal fell as much as 8.3 per cent, becoming the biggest loser in the index, after it cut its output guidance on New South Wales floods.
Meanwhile, Medibank said customer data stolen by hackers had been posted on a dark web forum. Shares were up as much as 2 per cent.
Investors will also be looking at the midterm elections in the United States, with crucial inflation data due on Thursday also at the top of their focus list.
US stocks rise
Wall Street ended higher on Tuesday during voting in midterm elections that will determine control of the US Congress, with investors betting on a political stalemate that could prevent major policy changes.
It was the third straight day of gains on the US stock market, leaving the Dow Jones Industrial Average down less than 10 per cent year-to-date.
Helping the blue-chip Dow, shares of drug-maker Amgen rallied almost 6 per cent to a record high after the company reported positive data related to its cholesterol drug and obesity treatment.
All 435 House of Representative seats and some 35 seats in the Senate are on the ballot, with experts saying there may be days of waiting before it is clear who won certain races.
Nonpartisan forecasts and opinion polls suggested a strong chance of Republicans winning a House majority and a tight race for Senate control.
Meanwhile, gold prices surged against the weakening dollar.
“Gold is your worry safe haven, but if there’s any worry in the marketplace it might be short,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.
“The biggest concern around the election is we may not know the results today.”
The result of the US midterm election will decide whether Democrats lose or retain congressional control halfway through President Joe Biden’s first term, raising the possibility of legislative gridlock.
“There’s some optimism around the potential for a divided government, with the democrats controlling the White House and the republicans potentially ready to take control of one or both chambers of congress,” Mr Sroka added.
“A more conservative fiscal policy which could be enacted by Republican-controlled congress would put less inflationary pressure on the economy and that would make the Fed’s job easier,” he said, adding that gridlocks in Washington have historically been positive for equity markets.
Inflation remains a top concern among US voters and the Federal Reserve, and market participants — with third quarter reporting season now largely in the books — are also awaiting crucial consumer price data on Thursday.
On Wall Street, the S&P 500 climbed 0.56 per cent to end the session at 3,828.13 points.
The Nasdaq gained 0.49 per cent to 10,616.20 points, while the Dow Jones Industrial Average rose 1.02 per cent to 33,160.83 points.
European stocks closed at their highest level in eight weeks as investors bet on a market-friendly outcome of the US election.
The pan-European STOXX 600 index rose 0.78 per cent and MSCI’s gauge of stocks across the globe gained 0.56 per cent.
Crude prices slid amid worsening COVID-19 outbreaks in China, raising concerns over softening demand and possible recession.
Brent crude oil slumped to $US95.05 a barrel, down almost 3 per cent, by 10:46am AEDT.
At the same time, Gold surged past the key $US1,700 per ounce level, touching its highest price in a month as the safe-haven metal moved in opposition to the dollar, adding 2.2 per cent to $US1,711 an ounce.
ABC/Reuters
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