Australia: Miners lift shares to 2-week high on China demand hopes

AUSTRALIAN shares extended gains on Tuesday (Jun 28), as miners rallied on hopes that easing Covid-19 restrictions in Shanghai and several other Chinese cities would boost iron ore demand.

The resources-heavy S&P/ASX 200 closed 0.9 per cent higher at 6,763.60, adding 3.9 per cent in the past 4 sessions and hitting a 2-week high.

However, it has fallen more than 6 per cent so far this month on concerns that aggressive interest rate hikes by central banks to control surging inflation would slow global economic growth.

China’s latest pledge to support its economy and gains in crude oil prices after last week’s rout helped Australian mining and energy stocks on Tuesday.

Miners jumped 3.3 per cent to mark their best session in more than a month. Sector heavyweights BHP, Rio Tinto and Fortescue Metals rose between 3 and 4.3 per cent.

“Broader markets remain optimistic but cautious,” said Mathan Somasundaram, chief executive of Deep Data Analytics.

Energy stocks climbed 3.6 per cent in their best day since Jun 8, with Woodside Energy and Santos up 4.3 per cent and 2.7 per cent, respectively.

“Rising supply-side issues in the energy market are likely to keep prices well supported, even amid concerns of weaker demand,” ANZ Research analysts said in a note.

On the downside, financials declined 0.3 per cent in their worst session in more than a week and snapped 3 straight days of gains. The country’s so-called “Big Four” banks fell in a range of 0.2 to 0.9 per cent.

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Australia: Shares nudge higher on mining, energy boost

Among individual stocks, seafood supplier Tassal Group surged a record 16.1 per cent after rejecting a sweetened US$721 million takeover offer from Canada’s Cooke.

Meanwhile, a Reuters poll found analysts expect Australia’s retail sales to show a 0.4 per cent expansion for May, lower than recent readings which may prompt the central bank to check its course on future interest rate hikes.

New Zealand’s benchmark S&P/NZX 50 ended 0.2 per cent higher at a more than 2-week peak of 11,018.62, with dairy firm a2 Milk among the top gainers. REUTERS