The Australian sharemarket on Monday moved within 100 points of its all-time high as the miners once again enjoyed the benefits of a commodity cycle supercharged by conflict in Eastern Europe.
Iron ore, lithium and gold players helped the benchmark ASX 200 start the week largely unaffected by reports of Russian war crimes and possible new sanctions, while energy stocks also pushed ahead as investors continue to increase their exposure to the resources sector.
The benchmark ASX 200 finished Monday’s trade 19.9 points, or 0.27 per cent, higher at 7513.7 thanks largely to gains for the likes of Fortescue Metals, Mineral Resources, Allkem, Lynas Rare Earths and Pilbara Minerals, although there were also a number of winners across the healthcare and technology spaces.
The index got as high as 7536.8 during trade, just 96 points off the all-time record set back in August, building on a decent lead from Wall Street.
The broader All Ordinaries, meanwhile, gained 33 points or 0.42 per cent to close at 7818.9, while the Aussie dollar edged higher to 75.15 US cents.
Geopolitical affairs again dictated market movements, with the release of supply from the US’s strategic oil reserves, along with continued hopes of de-escalation between Russia and Ukraine, pushing US oil below $US100 per barrel.
Conflict in Ukraine has, however, kept a fire burning under other commodities, with iron ore hovering near $US160 a tonne, coal prices at record highs and gold about $US1940 an ounce.
OANDA analyst Jeffrey Halley said Australia’s resource-heavy index remained attractive, even if the Reserve Bank finally shifts its forward guidance from ultra-dovish when the board meets on Tuesday.
“If it does, we can expect the Australian dollar to rally sharply, although it probably won’t be a great day for local equities,” Mr Halley said.
“Inflation isn’t going away anytime soon, and it’s still hard to go past Australia as a hedge for commodity-based inflation in the bigger picture.”
Saxo Markets’ Australian strategist, Jessica Amir, agreed the nation’s national export income and stock market will likely be jolted higher in the next three months and for the rest of the year, as the world braces for the big three Rs: record inflation, rising interest rates and a possible recession.
She noted Australia’s stock market outperformed global equities in quarter one as its coal, LNG, iron ore, gold and agricultural equities flew off to the races.
“We think momentum will continue in Q2, with mining and agricultural stocks primed to strengthen amid higher prices and accommodative China policy,” she said.
“As the Australian federal election campaigns ramp up, the coin jar for commodity and green energy spending will also be jingling.”
BHP rose 0.1 per cent to $52.46, Rio Tinto climbed 0.3 per cent to $120.66, Fortescue Metals jumped 3 per cent to $21.70 and Champion Iron rose 3.2 per cent to $8.06 in a strong day for bulk metals miners.
Mineral Resources was up 3.4 per cent to $56.46, Pilbara Minerals grew 5.5 per cent to $3.62 and IGO rose 4.1 per cent to $15 in another strong session for lithium miners.
Liontown Resources was also up 9 per cent to $2.12, Allkem gained 7.3 per cent to $13.31, Novonix was 8 per cent higher at $6.92 and Core Lithium leapt 4.2 per cent to $1.60.
Lynas Rare Earths hit a new all time high on its way to closing 2.7 per cent ahead at $11.39, while gold miners Newcrest, Northern Star, Evolution and St Barbara also shone.
The major banks all finished in the red and Macquarie Group was flat, while Woolworths, Wesfarmers, Transurban and Aristocrat Leisure were also among the blue-chip losers.
For healthcare stocks, CSL rose 0.5 per cent to $267.69. Resmed was up 0.8 per cent to $32.76 and there were also gains for Sonic, Cochlear, Pro Medicus, Nanosonics and Healius.
Afterpay owner Block Inc fell 0.2 per cent to $180.23 but rival Zip Co gained 6.5 per cent to $1.565.
Accounting software firm Xero rose 2.3 per cent to $103.36, Wisetech Global was up 1.2 per cent to $51.88 and Nearmap was 2.4 per cent higher at $1.48.
