ASX Lifts as BHP and Rio Tinto Lead the Market

Highlights:

• The S&P/ASX 200 rose 0.5%, driven by gains in mining and energy sectors, following positive cues from Wall Street and expectations of policy easing in the US and China.
• Rio Tinto (ASX:RIO) climbed 0.4% amid a takeover bid for Arcadium Lithium, which surged 40%, while BHP (ASX:BHP) advanced after being removed from a climate watch list.
• Banks and energy stocks also saw gains, with Woodside Energy (ASX:WDS) up 1.1% and Santos (ASX:STO) rising 0.6% as oil prices rebounded. 

Australian shares gained momentum in tandem with Wall Street, as the S&P/ASX 200 climbed by 43.5 points, or 0.5%, reaching 8230.9 points. This placed the index just 55 points shy of its all-time intraday high of 8285.7 set in late September. The rise came after a modest 0.1% gain the previous day. 

The mining and energy sectors led the charge, driven by expectations of policy easing in both the United States and China. Investors are increasingly optimistic about potential economic stimulus from China, with hopes that announcements over the weekend could further support commodity demand. 

Materials and Energy Lead Gains 

Eight of the eleven sectors closed in positive territory, with materials seeing the largest gains. Iron ore prices rose 1.2% in early Asian trading, boosting mining giants like Rio Tinto (ASX:RIO), which saw its shares increase by 0.4%. Rio Tinto’s performance was bolstered by a $9.9 billion all-cash takeover offer for Arcadium Lithium, sending Arcadium's stock soaring 40%. 

BHP (ASX:BHP) also contributed to the market rally, rising 0.6% after Norges Bank, Norway’s sovereign wealth fund, removed the company from its climate watch list. BHP had been under scrutiny for its coal operations but is now seeing renewed investor confidence. 

Fortescue Metals Group (ASX:FMG) joined the gains in the mining sector, rallying 1.2%, as the positive momentum in iron ore prices continued to support the materials sector. 

Banks and Energy Stocks Advance 

The major banks contributed to the market's rise, with ANZ (ASX:ANZ) leading the financial sector, advancing 1.1%. Other banking stocks saw steady gains, supporting the broader market rally. 

In the energy sector, oil prices rebounded ahead of potential supply disruptions due to Hurricane Milton, providing a boost to Australian energy companies. Woodside Energy (ASX:WDS) rose by 1.1%, Beach Energy (ASX:BPT) gained 1.6%, and Santos (ASX:STO) saw its shares increase by 0.6%. These gains came as the energy market remained cautious about potential supply chain impacts from the hurricane, keeping oil prices elevated. 

Notable Stock Movements 

ARB Corporation (ASX:ARB), an auto parts manufacturer, surged 3.3% after making progress in its acquisition of US-based 4 Wheel Parts. The company's expansion into the US market has been seen as a strategic move to enhance its global footprint and capitalize on the growing demand for auto parts. 

Financial services provider Netwealth (ASX:NWL) also posted strong gains, adding nearly 4% after reporting record growth in funds under administration during the September quarter. The company attributed its success to inflows of new capital combined with positive market performance, reinforcing its position as a leading wealth management platform. 

However, not all companies benefited from the day's upward momentum. Mexican food chain Guzman y Gomez saw a 0.5% dip as its US sales for the September quarter came in softer than expected. The market responded to the slower-than-anticipated growth, though the company continues to expand its footprint internationally. 

Meanwhile, New Zealand dairy producer Synlait Milk (ASX:SML) was unchanged despite announcing an upward revision to its forecast base milk price for the 2024-2025 season. The company raised its price to $NZ9.00 per kilogram of milk solids, reflecting stronger global demand. Despite this positive news, the stock remained flat, indicating that investors may be waiting for further developments in the dairy market. 

Outlook 

The Australian market’s rise was largely driven by optimism surrounding potential economic stimulus measures from China and the US, as well as strength in the materials and energy sectors. With iron ore prices climbing and oil markets remaining volatile due to potential supply risks, these sectors are likely to remain focal points for investors in the near term. 

Additionally, the ongoing consolidation in the mining industry, highlighted by Rio Tinto’s offer for Arcadium Lithium, underscores the increasing importance of lithium in the global energy transition. This acquisition could further fuel interest in the lithium sector, with more companies potentially looking to expand their positions in this critical market. 

As the market approaches its all-time high, investor sentiment remains cautiously optimistic, with further developments in global economic policy likely to shape the direction of the ASX in the coming weeks.