Australia: Shares mark best day in 3 months on resources boost

AUSTRALIAN shares jumped on Thursday (Sep 29), marking their best day in 3 months, driven higher by the commodities companies, while also tracking a rebound in global equity markets as the Bank of England (BoE) took measures to stem a rout in its bond markets.

The S&P/ASX 200 index rose as much as 2 per cent earlier in the day, before easing to finish the session 1.4 per cent higher.

The British central bank launched an emergency bond-buying programme to calm the fixed income markets, after a government initiative to cut taxes triggered a massive sell-off in equities globally and a rally in the greenback.

However, investors continue to fret about the possibility of a global economic recession as central banks worldwide continue raising interest rates to control runaway inflation.

“So, things seem tentatively calm at the moment (after the BoE’s actions), but that doesn’t take away from the fact that recession calls are indeed getting louder,” said Jessica Amir, a market strategist at Saxo Capital Markets.

Back in Australia, the commodity indexes led gains, with miners climbing the most at 2.3 per cent, tracking higher iron ore prices in top steel producer, China.

Sector bellwethers Rio Tinto, BHP Group and Fortescue Metals Group gained between 1 and 3 per cent.

Gold stocks also shone bright on the benchmark, rising about 3.5 per cent, with index majors Newcrest Mining and Northern Star Resources advancing 3 per cent and 4.3 per cent, respectively.

“I think the market is still not sure which commodities to lean on now. There are some doing well because the market thinks even in a recession they should play positively,” said Mathan Somasundaram, chief executive of Deep Data Analytics.

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Australia: Shares track global markets higher as Bank of England seeks to quell UK bond rout

The financial index traded 1 per cent higher, with the “Big Four” banks firming in the range of 1.1 per cent and 1.7 per cent.

New Zealand’s benchmark S&P/NZX 50 index rose 0.7 per cent to finish the session at 11,200 points. REUTERS