(AUSTRALIA) – The Australian sharemarket saw a notable upturn on Thursday, with robust performances by iron ore, coal, and uranium producers counteracting unexpected job market gains.
The benchmark S&P/ASX 200 Index surged by 32.6 points, equivalent to a 0.5% rise, closing at 7186.5 points. This upward trend extended to the All Ordinaries index, which also recorded a 0.5% gain.
These stock gains came despite robust employment data that reinforced the possibility of another interest rate hike by the Reserve Bank.
The data indicated the creation of 64,900 jobs, surpassing the forecasted gain of 23,000, while the unemployment rate held steady at 3.7%.
Analyst Tony Sycamore of IG remarked that these numbers wouldn’t offer the Reserve Bank the room it had been expecting to approve its rate hike cycle.
Central bank raises cash rate by 4%
The central bank has already increased the cash rate by 4 percentage points since May of the previous year.
Iron ore futures in Singapore continued their impressive rally, reaching a six-month high above $US120 per tonne.
This rally, lasting for over a month, pushed the commodity’s price up by more than 20%, confounding analysts and strategists.
As a result, material stocks on the ASX surged by 1%, with BHP, Fortescue Metals, and Rio Tinto gaining 1.1%, 3.4%, and 2.2%, respectively.
These gains occurred despite ANZ’s forecast of iron ore prices retreating to $US100 per tonne by year-end.
Uranium producers also saw significant gains, following a bullish report from the World Nuclear Association predicting a doubling of global uranium demand by 2040.
Uranium futures on the New York Mercantile Exchange reached levels not seen since March 2011. Consequently, Paladin Energy, Deep Yellow, and Boss Energy climbed by 3.9%, 8.3%, and 8.8%, respectively.
Coal producers, including Yancoal, Whitehaven, and New Hope, also experienced gains. In addition, the financial sector benefited from easing bond yields following an uptick in US inflation.
The positive market sentiment extended to Myer Holdings, which reported a 12.5% growth in top-line sales for the full year, and Fletcher Building, which traded ex-dividend, experiencing a 4.4% decline.
Starpharma, Yellow Brick Road, and Metgasco also made notable moves in the market, while Downer EDI secured a substantial contract from the Australian Defence Force valued at up to $750 million.
