ASX Rises to Six-Week High: Banks and Miners Drive Momentum

January 21, 2025 11:42 AM AEDT | By Team Kalkine Media

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ASX Rises to Six-Week High: Banks and Miners Drive Momentum — Image source: shutterstock

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Highlights

ASX touches a six-week high, supported by banks and miners.

(ASX:LTR) rallies 8% following a strong production report.

US policy focus and holiday impact trading volumes.

The Australian sharemarket extended its upward momentum on Tuesday, reaching a six-week high as gains in banking stocks and the mining sector lifted sentiment. By mid-morning, the S&P/ASX 200 index climbed 0.8% to 8416.2 points, reflecting broad-based strength with ten of the eleven industry groups trading higher. The All Ordinaries index echoed the upward movement with a 0.8% rise, while the Australian dollar advanced to trade at US62.77¢.

Investor optimism followed clarity on US economic policy after President Trump’s first day in office steered clear of aggressive tariff announcements. Market participants remain watchful of policy developments, particularly in trade and immigration, given their potential to impact global supply chains and the labor market.

On Wall Street, markets remained closed Monday for Martin Luther King Jr. Day, limiting global trading activity. The lack of US market movement, coupled with broader relief in policy concerns, saw significant inflows into Australian financials and materials stocks.

Banks Lead Gains

The financial sector was the standout performer, with key players rallying. (ASX:CBA) saw a 1.6% increase, while (ASX:NAB) surged 2.5%, reflecting strong investor interest. This robust performance underscores optimism in the sector's growth amid improving market sentiment.

Mining and Resources Support Uptrend

The materials sector benefited from notable contributions by mining giant (ASX:BHP), which gained 1.6% after reporting an impressive rise in copper production. (ASX:LTR) soared 8% following the company's quarterly report showing output had tripled in the December quarter. Energy-focused (ASX:YAN) climbed 8.6% after reaffirming its 2024 production guidance.

Stock-Specific Moves

Wealth platform provider (ASX:HUB) topped the index with an impressive 11.9% surge, supported by a record $5.5 billion in quarterly platform net inflows. Meanwhile, (ASX:ORG) weighed on utilities, declining 1.6%.

The ASX’s broader rally came amidst cautious optimism surrounding US economic direction and hints that financial markets could temper inflation worries if disruptions to supply chains and labor forces remain contained.

Investors continue to monitor upcoming developments as global trends and local updates offer fresh direction for the market.

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