A stunning session for mining and energy companies more than outweighed a weak performance by technology and healthcare firms, as the ASX finished Tuesday’s session 0.9 per cent higher and at its best level in two months.
Iron ore giants BHP, Rio Tinto and Fortescue Metals powered the market higher alongside various lithium, coal and gold names, as well as oil and gas companies such as Woodside, Santos and Beach Energy.
The major banks also finished ahead as the benchmark ASX 200 gained 62.6 points to finish at 7341.1 and claim its highest close since January 20.
The market had been trading as much as 1.4 per cent higher and briefly touched a peak of 7377.3 before a late bout of selling.
Elsewhere, the broader All Ordinaries rose 61.8 points or 0.8 per cent to finish at 7620.7 and the Australian Dollar once again eased just below 74 US cents at the local close.
City Index analyst Tony Sycamore noted that surging commodity prices and higher bond yields had helped the cyclic materials, energy and financial sectors return to vogue as the market secured its first close above the 200 day moving average of 7333 since mid-January.
Tiger Brokers’ chief strategy officer, Michael McCarthy, said yields rocketed to three-year highs overnight following comments from the Federal Reserve chairman that US inflation remained dangerously high.
This helped weigh US markets flat, while another oil price leap also unsettled investors somewhat.
Mr Sycamore said the prospect of higher yields had, however, proved a positive for the local banking stocks.
“If there is one thing the Australian financial sector likes, it is higher yields … as it allows the big banks to increase profitability via higher net interest margins,” Mr Sycamore said.
National Australia Bank gained 1.1 per cent on Tuesday to close at $31.23 and Macquarie Group 1.3 per cent higher at $197.58, while Bendigo and Adelaide Bank added 1.2 per cent to finish at $10.60.
Commonwealth Bank added 0.4 per cent to finish at $106.07 and Westpac was 0.3 per cent higher at $23.62.
There was more pain, however, for Magellan Financial, which lost another 3.8 per xjmtzywcent to $14.49, while fintech firms such as Zip, Sezzle, Block and Tyro Payments ended lower.
A softening in iron ore did little to temper enthusiasm for the mega miners, with BHP climbing 5.1 per cent to $48.82 and Rio Tinto up 3 per cent to $113.74.
Fortescue Metals ended 1.2 per cent ahead at $18.94, Mineral Resources was 4.9 per cent higher at $49.09, BlueScope Steel rose 3 per cent to $20.59 and South32 jumped 3.1 per cent to $5.03.
For lithium names, Pilbara Minerals added 4.5 per cent to $3 and Liontown Resources ended 6.3 per cent ahead at $186. Allkem gained 4.7 per cent to $10.43 and Falcon metals rose 7 per cent to 38 cents.
Gold miner Newcrest added 2.8 per cent to $25.98 and Northern Star was up 1.9 per cent to $10.60, as the precious metal got a boost to $US1935 amid mild risk aversion in the US.
Oil gained 8.5 per cent to $US112 on reports the EU was considering joining the US in a Russian oil embargo, a development that helped Woodside Petroleum rise 1.6 per cent to $32.16.
