ASX Gains Nearly 1% as Financials and Miners Lead Rally

January 08, 2025 04:29 PM AEDT | By Team Kalkine Media

ASX Gains Nearly 1% as Financials and Miners Lead Rally — Image source: Shutterstock

Inflation Trends Fuel Market Sentiment

According to the Australian Bureau of Statistics, core inflation for November eased to 3.2% from 3.5% the previous month. In contrast, headline inflation slightly increased to 2.3%. This data reinforced market expectations of a potential rate cut, with the likelihood of a February RBA move rising to 68%, up from 60%.

Financial Sector Drives Gains

Banking stocks were the star performers on Wednesday. Commonwealth Bank (ASX:CBA), National Australia Bank (ASX:NAB), Australia and New Zealand Banking Group (ASX:ANZ), and Westpac (ASX:WBC) all surged by over 2%. This momentum was attributed to expectations of lower borrowing costs, which often benefit financial institutions.

Miners See a Turnaround

Mining stocks rebounded following recent losses, despite iron ore prices lingering at a four-month low. Fortescue Metals Group (ASX:FMG) rose 1.3%, Rio Tinto (ASX:RIO) gained 1%, and BHP Group (ASX:BHP) advanced by 1.5%.

Technology Sector Slips

Tech stocks were among the few sectors in the red. Software company Xero (ASX:XRO) declined 1.4%, data center operator NextDC (ASX:NXT) slipped 0.8%, while WiseTech Global (ASX:WTC) saw marginal gains of 0.2% in volatile trade.

Significant Stock Movements

Strike Energy (ASX:STX) soared 5.9%, while gold miner Bellevue Gold (ASX:BGL) recovered 4.5% after a prior session dip. However, Boss Energy (ASX:BOE) and Paladin Energy (ASX:PDN) faced the largest declines, shedding 4.1% and 4.9%, respectively.

Regenerative medicine firm Avita Medical (ASX:AVH) plunged 19.3% after revising its revenue guidance for 2024 due to slow demand. Meanwhile, Regis Resources (ASX:RRL) gained 4.3% following an increase in gold production, while West African Resources (ASX:WAF) advanced 2.4% on a 7% rise in quarterly output.

This varied sectoral performance highlights the interplay between cooling inflation data and evolving investor sentiment. As key industries recover from volatility, the ASX demonstrates resilience in navigating shifting macroeconomic conditions.

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