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A rally among the miners lifted the S&P/ASX 200 by 0.9 per cent, or 64.8 points, to 7442.7 points on Friday as the falling US dollar boosted the price of commodities, including copper, gold, oil, iron ore, and natural gas. The materials sector jumped 1.9 per cent, with Fortescue Metals shares advancing 1.4 per cent to a record closing high of $27.85. Iron ore peers Rio Tinto and BHP both firmed more than 2 per cent, and gold miners were also higher as the precious metal’s price fetched $US2051 an ounce.
The Australian dollar climbed to buy $US67.1¢ at the closing bell, versus US65.9¢ at the end of the last trading week. Over a week headlined by the US Federal Reserve’s forecast for several interest rate cuts next year, Australia’s benchmark share index advanced 3.4 per cent.
Moreover, the mining and energy sectors rallied 1.8 per cent and 2 per cent, respectively. This offset the weak performance across the rest of the local bourse as no other sector finished in the green. Heavyweights such as BHP (up 2.4 per cent), Fortescue (up 1.4 per cent), and Rio Tinto (up 2.1 per cent) all traded higher. Woodside (up 1.4 per cent), Santos (up 3.2 per cent), and Ampol (up 0.7 per cent) also contributed to the overall positive performance of the market.
The performance of the Australian sharemarket was reflective of the global market trends as most of Wall Street rose following its big rally from the day before. The positive momentum extended from a rally in copper and other base metals, driven by the falling US dollar and bond yields. This trend also saw short sellers targeting Pilbara Minerals, resulting in a 5 per cent increase.
In addition to the positive outlook for mining and energy stocks, the NAB chairman projected that Australia will avoid a recession. However, Iluka issued a warning on cost blowouts and delays to a rare earths project. Meanwhile, ASIC banned Blumenthal for five years. Despite these instances, the overall sentiment was lifted by the positive performance of the mining and energy sectors, further boosted by the falling US dollar and bond yields.
The overall market performance reflects an interplay of global economic indicators and commodity prices, with the direction of the US dollar having a considerable impact. The positive performance of the Australian sharemarket, particularly in the mining and energy sectors, indicates a sentiment of confidence and resilience in the face of global economic shifts and uncertainties.
