US jobs figures boost investor confidence
The benchmark S&P/ASX 200 Index rose 26.7 points, or 0.5 per cent, to 5156.2, while the broader All Ordinaries added 28.4 points, or 0.6 per cent, to 5133.8.
The resource sector was the main driver, with materials jumping 2.7 per cent. BHP shares gained 2.8 per cent to $32.87, while Rio Tinto pushed up 3.1 per cent to $56.20 and Fortescue Metals finished 5.9 per cent higher at $3.61.
Credit Suisse strategist Damien Boey said strong performances in commodity markets at the end of last week, including a 6 per cent rise in copper prices, helped the miners jump out early.
"People are looking at resources stocks and they're thinking: 'well they're looking cheap on a variety of metrics, and commodities prices seem to have stabilised. On top of that, maybe some of these miners might be able to free up some cash flow by freeing up their capex,"' he said.
To start the day, the ASX 200 surged 1.4 per cent, breaking through the 5200-mark, but the release of March retail sales figures and the ANZ job advertisements survey pared back much of the gains.
Seasonally adjusted, retail sales fell 0.4 per cent in March; economists were expecting a 0.1 per cent rise. ANZ job ads dropped for the second consecutive month, falling 1.3 per cent in April.
The dollar eased more than a quarter of a cent after the data releases, sliding from above US103¢ to US102.75¢ in late trading.
The RBA is due to deliver its decision on the official cash rate on Tuesday. Credit Suisse interest rate futures are pricing in a 52 per cent chance of a 25-basis-point cut.
Among the banks, results were mixed. CBA added 0.9 per cent to $71.67 while Westpac lost 1.1 per cent to $33.17, NAB slid 0.7 per cent to $33.50 and ANZ finished 0.3 per cent lower at $31.51.
Shares in Boral lost 3.2 per cent after the company issued a profit warning.
Frequently Asked Questions about this Article…
The ASX 200 rose after a rally in miners following better-than-expected US jobs figures that boosted investor confidence. The S&P/ASX 200 gained 26.7 points (0.5%) to 5,156.2, while the All Ordinaries added 28.4 points (0.6%) to 5,133.8. Note the index had surged as much as 1.4% earlier in the day, briefly breaking the 5,200 mark before some gains were pared.
Miners led the market higher: BHP shares rose 2.8% to $32.87, Rio Tinto climbed 3.1% to $56.20 and Fortescue Metals jumped 5.9% to $3.61. The lift was supported by stronger commodity markets — including a notable rise in copper — and investor views that some resource stocks look cheap and could free up cash flow by trimming capex.
A 6% jump in copper prices helped lift sentiment for the whole resource sector. Rising metal prices can boost miners' revenue prospects and make their shares more attractive to investors, particularly if commodity prices appear to be stabilising and companies can improve cash flow by reducing capital expenditure.
Retail sales and labour-market signals trimmed earlier gains: seasonally adjusted retail sales fell 0.4% in March versus economists' expectation of a 0.1% rise, and ANZ job advertisements dropped 1.3% in April (the second consecutive monthly fall). Those weaker-than-expected data releases pared back the ASX's earlier rally.
The Australian dollar eased after the data, sliding from above US103¢ to about US102.75¢ in late trading — a move of a little more than a quarter of a cent following the weaker domestic numbers.
The RBA was scheduled to announce its official cash rate on Tuesday. According to Credit Suisse interest rate futures cited in the article, markets were pricing about a 52% chance of a 25-basis-point rate cut.
Bank shares were mixed: Commonwealth Bank (CBA) rose 0.9% to $71.67, while Westpac fell 1.1% to $33.17, NAB slipped 0.7% to $33.50 and ANZ eased 0.3% to $31.51. 'Mixed results' means some banks gained while others fell, reflecting differing investor reactions to sector news and broader market drivers.
Boral shares fell 3.2% after the company issued a profit warning. For everyday investors, a profit warning is a key signal that expected earnings may be weaker than previously forecast, which can lead to further price volatility and merit closer monitoring of the company's updates and guidance.
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