US equities rallied overnight on reports of near-record profits from the major banks and a lower-than-expected US Consumer Price Index (CPI) data, with the momentum flowing through to the Australian market.
The S&P/ASX 200 spiked 128.20 points, or 1.56%, to 8,341.50 points as of 10.30am AEDT.
Over the last five days, the index is virtually unchanged, but is currently 2.03% below its 52-week high.
All of the 11 sectors started the day in the green. Financial is the best performing sector, gaining 0.80% and rebounding from its recent decline. The sector is down 2.51% for the past five days.
Materials rose 0.65%, utilities advanced 0.42%, industrials lifted 0.22% and energy edged up 0.11%.
US core CPI for December was softer than expected, rising just 0.2% month over month – the smallest increase in six months, which ANZ says drove bond yields lower and equities higher.
Meanwhile, a “risk-off tone” improved sentiment across the commodity sector, according to ANZ, while potential disruptions to Russian energy supplies are likely to keep upward pressure on oil and gas prices.
Aluminium was a particular beneficiary, climbing 1.6% on news it too could be included in sanctions against Russia over its invasion of Ukraine.
“Copper edged higher amid a risk-off tone across markets after a surprise slowdown in US inflation reinforced bets that the Fed is on track to keep cutting rates this year,” ANZ economists say.
“The prospect of slower growth in supply also provided some support.”
Iron ore and gold also moved higher.
On the S&P/ASX 200, gold miner Genesis Minerals (ASX:GMD) rallied 5.12% to $2.88 after reporting record December 2024 gold production of 57,055 ounces, which boosted cash and equivalents 34% to $238 million.
At the small cap end of the market, emerging urea fertiliser producer NeuRizer (ASX:NRZ) reversed yesterday’s slide, doubling to $0.002 while diversified explorer Scorpion Minerals (ASX:SCN) rose 26.7% to $0.019.
Base and precious metals junior Austin Metals (ASX:AYT) dipped 20% to $0.004 and Bowen Coking Coal (ASX:BCB) was down 6.3% at $0.008 in early trade on Thursday (16 January).
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & iStock
