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The Australian stock market experienced a robust surge on Wednesday, propelled by encouraging US inflation figures that alleviated traders' concerns regarding potential rate hikes. The S&P/ASX 200 index surged by 99.2 points, or 1.4%, reaching a pinnacle of 7105.9.
Despite fresh inflation apprehensions, the All Ordinaries outperformed expectations by advancing 1.5%.
Currently, the Australian dollar stands at US65.05.
Wall Street witnessed significant gains, with the Dow Jones rising by 1.4%, the S&P500 by 1.9%, and the tech-oriented NASDAQ soaring by 2.4%. These remarkable rallies were triggered by the latest US Consumer Price Index (CPI) report, indicating a decline in inflation to 3.2% in October from 3.7% in September and August.
Within the Australian benchmark, 10 out of 11 industry sectors concluded positively, primarily led by a robust rally in real estate stocks sensitive to interest rate fluctuations, surging by 4.6%. Sector heavyweight Goodman showcased a 3.4% increase to AU$23.55, Stockland surged by 6.1% to AU$4.03, and Scentre climbed 5.1% to AU$2.70.
The iron ore sector also demonstrated remarkable performance following news about Beijing's contemplation of an additional round of stimulus to bolster the country's sluggish economic growth. Singapore futures for the commodity soared above $US130 a tonne on the December contract.
Major iron ore players exhibited notable gains: Fortescue rose by 3.5% to AU$25.18, BHP added 1.8% to AU$46.84, and Rio Tinto ascended by 2.6% to AU$125.61.
In light of the latest wages data revealing a 4% pay growth in the year to September—its highest since 2009—economists anticipated this surge in wages to be a singular event.
Commonwealth Bank economist Belinda Allen noted in a client memo, " Looking forward, the 1.3 per cent lift in wages will not be repeated in the December quarter of 2023 given the timing of award wage increases is solely in the September quarter this year. We expect the pace of wages growth to return to sub 1 per cent as indicators of the labour market suggest a degree of loosening.”
