Market wrap: ASX lifts on post-budget mining rally

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The Australian sharemarket lifted on Wednesday on the back of a mining rally, fuelled by bourse heavyweight BHP, and the federal budget’s big spend on critical minerals.

The benchmark ASX200 rose 0.35 per cent, or 26.9 points, to close at 7753.7, while the broader All Ordinaries index lifted 0.32 per cent, or 25.2 points, to finish at 8020.9.

Technology stocks climbed 0.56 per cent to 3050.5 points.

The Aussie dollar was up 0.22 per cent against the Greenback to buy US66.4c at the closing bell.

Eight of 11 industry sectors ended in the green, led by materials with a 1.19 per cent rise.

Behemoth BHP propelled the charge with a 2.18 per cent jump to $44.09 a share.

The miner, which accounts for about 10 per cent of the benchmark index, surged after takeover target Anglo American told investors it would break up and sell off parts of its vast operations to concentrate on copper, iron ore and crop nutrients.

Anglo’s Queensland coal operations, which sit adjacent to BHP’s Bowen Basin mines, are now up for sale.

Miners in the critical minerals space also boomed on the budget’s $13.7bn allocation for production tax credits for minerals set to underpin the green energy transition.

Renascor Resources soared 30 per cent to 13c, while Arafura Rare Earths jumped 5.41 per cent to 20c and Aeris Resources surged 7.41 per cent 29c.

Alongside the miners, IG market analyst Tony Sycamore said the trading day had lifted on some post-budget “relief” about Australia’s inflation outlook.

“As the debate around the federal budget’s impact on inflation heats up, it’s worth highlighting the Australian interest rate market is now pricing in a 10 per cent chance of a 25 basis point Reserve Bank of Australia rate cut at its board meeting on December 10, while retaining a 10 per cent chance of a 25 basis point RBA rate hike by September,” he said.

“The key takeaway here is that the rates market appears comfortable the budget struck the right balance between providing cost-of-living relief without inflaming inflationary concerns.

“There is a full 25 basis point rate cut priced in by next July.

“If you want to try and find the sensible middle ground, the bond market always has a pretty good read on things and we’ve got finally the re-emergence of a rate cut before year-end.

“And we haven’t seen that for quite some time, particularly after that quarter one inflation data was hotter a few weeks ago.”

The big banks presented a mixed picture, with Commonwealth Bank edging up 0.5 per cent to $119.93, but Westpac, NAB and ANZ all falling.

Westpac lost 0.9 per cent to $26.36, NAB fell 0.71 per cent to $33.75 and ANZ dropped 1.18 per cent to $27.68.

Wall Street recorded a positive session overnight on Tuesday, with the Dow Jones up 0.32 per cent, or 126 points, to 39,558, the S&P 500 index up 0.48 per cent to 5246 and the tech-heavy Nasdaq rising 0.75 per cent to 16,511.

In corporate news, oil and gas giant Santos revealed it would shed 200 jobs following a review of its operations in WA, the Northern Territory and East Timor.

The company dipped 0.13 per cent to $7.72 a share.

The takeover drama between ARN Media and Southern Cross Austereo continued, with SCA rejecting a rejigged offer after ARN’s initial bid collapsed over the weekend.

ARN dipped 0.58 per cent to 85c while SCA traded flat at 85c.

The top gainer on the ASX200 was IDP Education, which leapt 7 per cent to $17 a share, while the largest laggard was Healius Limited, which slumped nearly 6 per cent to $1.26.

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