(AUSTRALIA) – ASX – In a session characterized by lackluster activity, the Australian sharemarket made modest gains as investors kept their eyes on the upcoming US inflation data set to be released on Wednesday.
This data is expected to shed light on whether the Federal Reserve is nearing its peak cash rate.
The mining sector played a crucial role in offsetting losses in the energy sector, despite a rise in oil prices. By the close of trading, the benchmark S&P/ASX 200 Index had added 14.6 points, or 0.2 percent, reaching 7206.9. Similarly, the All Ordinaries saw a 0.2 percent climb.
Consumer sentiment dips, business confidence rises
Local data revealed that consumer sentiment took a 1.5 percent dip in September, dropping to 79.7 index points, particularly among renters, according to the latest Westpac-Melbourne Institute survey.
Conversely, business confidence saw a 2-point rise last month, according to NAB’s monthly survey.
However, the spotlight is on tomorrow’s release of the US consumer price index report, expected after the close of local trading.
Projections indicate that headline inflation in the world’s largest economy could inch up to 3.6 percent from the current 3.2 percent, largely due to an uptick in oil prices.
Although inflation in the US has decelerated significantly from last year’s four-decade high, it remains above the Fed’s 2 percent target, prompting bond traders to increase their bets on further action by the central bank.
Tim Waterer, Chief Market Analyst at KCM Trade, emphasized, “Financial markets remain sensitive to interest rate expectations and to any data which may shift or sway the outlook.”
Market Highlights:
- Iron Ore and Mining Sector: A rally in iron ore prices lifted the ASX, with heavyweight companies such as Rio Tinto surging 1.5 percent to $114.11, BHP rallying 1.2 percent to $44.19, and Fortescue Metals climbing 1.7 percent to $19.96. Iron ore prices rose by 4 percent, surpassing $US117 a tonne, buoyed by positive new bank lending data from China and expectations of further stimulus in the nation’s property sector.
- Gold Miners: Gold miners experienced gains following an optimistic forecast from RBC Capital Markets, which projected gold to reach $1960 per ounce by December next year, a 16 percent increase from its previous estimate. Gold was trading at $US1921.3. Notable gains were seen in shares of St Barbara, Northern Star Resources, Ramelius Resources, and Silver Lake Resources.
- Energy Sector: The energy sector faced the most significant losses, declining by 1.4 percent. Woodside Energy lost 1.5 percent to $37.69, Santos slid 1.3 percent to $7.72, even as it secured $US850 million ($1.3 billion) in a 10-year bond sold to US investors. Ampol also fell 1.3 percent to $34.16.
- Viva Energy Group: Fuel retailer and refiner Viva Energy Group saw a notable decline of 7.3 percent to $2.93 after reports of Swiss-based Vitol considering selling its stake in a $500 million minimum block trade.
- Liontown Resources: Takeover target lithium mining company Liontown Resources experienced a slight decline of 0.3 percent to $3, despite billionaire Gina Rinehart not ruling out launching a bid to rival Albemarle’s $6.6 billion acquisition for the company. Hancock Prospecting, owned by Mrs. Rinehart, disclosed a 7.72 percent stake in Liontown.
- Select Harvests: Almond grower Select Harvests saw a significant rally, with shares surging 10.4 percent after presenting an optimistic outlook.
As the Australian market navigates these developments, all eyes remain on the impending US inflation report, which could hold significant implications for the global financial landscape.
