Aust shares rally as Fed turns more dovish

The local share market has started the month off with a bang, rallying after Federal Reserve chairman Jerome Powell declared that smaller interest rate hikes could begin this month.

The benchmark S&P/ASX200 index was on track for its best day in three weeks at noon AEDT on Thursday, up 62.5 points, or 0.86 per cent to a new seven-month high of 7346.4.

It had been up as many 91 points earlier in the morning.

The broader All Ordinaries was at noon up 64 points to 7544.7, an 0.86 per cent rise.

The gains came after Powell said in a speech that while the Fed had a long way to go to restore price stability, its policy moves would take time to work their way through the system.

"Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," the US central banker said. 

"The time for moderating the pace of rate increases may come as soon as the December meeting."

The S&P500 rallied 3.1 per cent and the NASDAQ gained 4.4 per cent, while the US dollar slid sharply, hitting its lowest level against the Aussie since mid-September.

Every ASX sector other than energy and healthcare were up at midday, with materials spiking 2.6 per cent as China lifted its coronavirus restrictions in the cities of Guangzhou and Chongqing.

BHP gained 2.4 per cent to $46.60, Fortescue Metals climbed 3.1 per cent to $19.98 and Rio Tinto gained 3.2 per cent to $113.12.

Goldminers rose as the price of the precious metal lifted in anticipation of a slowdown in US interest rate hikes. Northern Star gained 4.3 per cent, Newcrest added 5.1 per cent and Evolution was up 6.1 per cent.

In the financial sector, Macquarie was up 1.8 per cent to $181.94 while the big retail banks were posting more modest yet respectable gains.

ANZ had climbed 1.0 per cent, Westpac had added 0.9 per cent, CBA was up 0.7 per cent and NAB had gained 0.4 per cent.

Domino's Pizza Enterprises was in a trading halt after announcing a $165 million capital raising to fund the buyout of its joint venture partner in Germany after Domino's Pizza Germany exercised an option in their partnership.

The $150 million institutional portion of the placement will be at a two per cent discount, Domino's said.

Meanwhile the Australian dollar was buying 68.01 US cents at midday, up from 67.00 US cents at Wednesday's ASX close.