Australian shares hit a record high on Thursday as gold, iron ore, and lithium miners rose amid a rebound in resource prices. The interest rate sensitive banking, property and retail sectors also climbed as investors bet on rate cuts in the second half of 2024.
In early trade the S&P/ASX 200 gained 0.8 per cent to 7881.7 points and topped its previous record intraday high from March 8 of 7853.1 points.
“The rally is focused on miners today, so that’s an indication of a cyclical upswing and more comfort with the outlook for the global economy,” said Sean Sequeira the chief investment officer at Australian Eagle Asset Management.
“The banks’ rally had taken a lot of the money flow from some of the more stapled earnings stocks and now the market might be rotating into these cyclical businesses.”
The miners did much of the heavy lifting, with BHP adding 1.8 per cent and gold giant Newmont jumping 3.6 per cent. The gold price neared a record high of $US2211 an ounce on Thursday morning.
“A rising gold price suggests the market expectations further falls in inflation should support the central banks move to cut rates later this year. Safe haven demand also remains strong,” ANZ told investors this morning.
US stocks also extended their first-quarter advance. The Dow paced Wall Street higher, rising 478 points to near 40,000 points. The S&P 500 closed at a record high and within 13 points of its record intraday high.
“The S&P500 continues to defy all of the naysayers,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “As we have been saying for over a year now, if the economy continues to expand and corporate profits keep growing with it, the stock market will keep moving higher, even in the absence of rate cuts.”
February’s retail sales data is set for release at 11.30am. “The volatility of Black Friday and year end should be behind us, and we pencil in a decent rise of 0.4 per cent month-on-month,” said National Australia Bank. Market consensus also calls for a 0.4 per cent rise.
Stocks in focus
Ramsay Health Care shares traded slightly lower to $56.24 after broker Citi warned tariff increases for its French hospitals are below its expectations.
Australian Clinical Labs, Sigma Healthcare and Westgold Resources all trade ex-dividend on Thursday.
MinRes to auction lithium in quest for ‘real price transparency’ Chris Ellison’s Mineral Resources and New York-listed Albemarle sell lithium at well above spot price amid renewed efforts to make an opaque market dominated by China more transparent.
