Australian shares post best session in nearly three weeks

[SYDNEY] Australian shares climbed on Monday (Aug 24) in their strongest session in nearly three weeks, as heavyweight miners rallied on firmer iron ore prices and pushed BHP Group to a record high, outweighing weaker financial stocks.

The benchmark S&P/ASX 200 index rose 0.5 per cent to 9,103.10 points, its biggest gain since August 5. The index hit its highest level since August 14 earlier in the session.

The benchmark lost 0.6 per cent last week.

Miners led the charge on Monday, rising as much as 3 per cent to a record high. The rally, however, pushed the sub-index’s relative strength index (RSI) above 70, signalling overbought conditions.

“The Australian index is being driven largely by a strong bid for the resources sector,” said Tim Waterer, chief market analyst at KCM Trade.

“Broader strength in copper prices, supported by the structural demand story around electrification and AI-related infrastructure, is attracting capital (in the sector).”

The world’s largest listed miner BHP ended 3 per cent higher at A$67.12, a record closing level, a week after BHP posted annual earnings that topped estimates.

Higher iron ore prices also helped drive the sub-index’s gains.

Gold stocks advanced 1.7 per cent as a subdued dollar lent support to bullion prices, with Evolution Mining and Northern Star Resources gaining 2.5 per cent and 1.8 per cent, respectively.

SEE ALSO

Kospi falls 1.4% as Asian stocks dip with AI, Fed meeting in focus

Limiting gains, financials fell 0.7 per cent to their lowest close since June 12. All the “big four” banks dropped between 0.3 per cent and 0.7 per cent.

“The banks are likely to remain under pressure (in the near term) until there are clearer signs that the housing and mortgage weakness is stabilising,” added Waterer.

Elsewhere, technology stocks rose 1 per cent, while healthcare stocks gained 0.6 per cent.

Markets are also focused on Wednesday’s monthly inflation reading for further signals on the Reserve Bank of Australia’s next policy move.

Across the Tasman Sea, the New Zealand benchmark S&P/NZX 50 index fell 0.7 per cent to 13,881.88 points, its biggest drop since August 17. REUTERS