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Highlights
- ASX rises as mining stocks gain on China stimulus hopes.
- BHP and Rio Tinto see growth amid rising iron ore prices.
- Energy stocks benefit from increased oil prices due to Middle East tensions.
The Australian sharemarket edged higher today as investor sentiment improved on expectations of further economic stimulus from China. The benchmark S&P/ASX 200 Index rose by 9.4 points, or 0.1%, to 8214.8 by mid-morning, recovering from an earlier dip due to a weak lead from Wall Street.
Mining stocks played a key role in driving the market upwards, with BHP (ASX:BHP) climbing 1.3% and Rio Tinto (ASX:RIO) increasing by 2%. This came as iron ore futures surged above $US114 per tonne in Singapore, with market analysts suggesting prices could reach $US120 if China announces new public spending measures. Investors are eagerly awaiting an announcement from China’s National Development and Reform Commission, which is scheduled for later in the day.
Seema Shah, Principal Asset Management’s global strategist, noted that a well-targeted fiscal stimulus from China could significantly boost both its domestic economy and have positive global economic impacts, particularly benefiting sectors like mining.
Energy stocks also saw gains, driven by rising oil prices. Brent crude reached over $US80 a barrel, marking its highest level since August, as escalating tensions in the Middle East fueled speculation about potential disruptions to Iran’s oil infrastructure.
Stocks in Focus
West African Resources (ASX:WAF) saw a sharp recovery, jumping 9.7% after concerns about its mining permits in Burkina Faso subsided. The company confirmed that its permits are not under review, calming investor fears after a 20% drop the previous day.
In other corporate news, Incitec Pivot (ASX:IPL) announced that its chief financial officer, Paul Victor, will step down from his role, staying on until February 2025. Shares in the company dropped 0.7% following the news.
Meanwhile, NRW Holdings (ASX:NWH) secured a $360 million contract with Evolution Mining (ASX:EVN) for surface mining work at Castle Hill in Western Australia. Despite the positive contract news, NRW shares dipped by 1.1%.
The ASX gains reflect optimism around China’s potential stimulus measures, which could support global growth, while energy and mining sectors continue to be key drivers for the market’s performance.
