Resources sector pushes ASX higher on back of stronger commodity prices, helped by positive US lead

The Australian sharemarket was in the green for the second straight day after a positive lead from Wall Street and as resources stocks rose on stronger commodity prices.

The benchmark S&P/ASX200 index closed 0.48 per cent higher at 7474.4, while the All Ordinaries Index rose 0.45 per cent to 7797.5.

US stocks rose modestly on Wednesday in choppy trade after a key inflation report showed a 40-year high but largely matched forecasts, and as investors weighed the implications for the central bank and its plans to raise interest rates this year, Ord Minnett said.

IG market analyst Kyle Rodda said the US inflation figures did not justify an even more hawkish pivot from the Federal Reserve.

The ASX200 was the region’s outperformer, but the index faded throughout the session as traders once again sold into the key 7480 level, Mr Rodda said.

OMG chief executive Ivan Tchourilov said the resources sector was a stellar performer amid a pinch in supply for key materials and sustained demand.

Camera IconBrazil’s loss is Australia’s gain when it comes to iron ore. Rebecca Le May Credit: NCA NewsWire

“Heavy rain is impacting the world’s largest iron ore exporter, Brazil, while steel mills in China are still humming along for the time being, keeping prices for the vital ingredient buoyant,” he said.

“Developed economies are staying open despite the rampant cases of Covid-19, maintaining oil and gas demand.

“For the same reason, US inflation is still climbing higher; the gold spot price is being pushed higher by those hedging against inflation with the world’s favourite shiny metal.”

Rio Tinto advanced 4.13 per cent to $111.70, BHP gained 3.83 per cent to $46.85, Fortescue lifted 2.49 per cent to $21.40, South32 climbed 3.67 per cent to $4.24 and Queensland Pacific Metals leapt 14.29 per cent to 20 cents.

Woodside rose 2.26 per cent to $24.90, Santos added 1.58 per cent to $7.09, Cooper Energy jumped 5.26 per cent to 30 cents and Beach Energy put on 2.17 per cent to $1.41.

Gold producer Pantoro Ltd surged 16.67 per cent to 42 cents.

Camera IconGold is currently well above $US1800/oz. Credit: Supplied

“Nickel and copper both bounced overnight,” Mr Tchourilov said.

“Nickel futures for the critical battery ingredient reached a decade high before dropping slightly.”

Among nickel and copper miners, IGO Ltd improved 3.75 per cent to $12.45, Chalice Mining lifted 3.56 per cent to $8.72 and Nickel Mines gained 5.16 per cent to $1.63, making it the second best performing stock on the ASX200 behind Crown Resorts.

The scandal-plagued casino operator leapt 8.77 per cent to $12.65 after US private equity giant Blackstone increased its takeover bid by 60 cents to $13.10, which will be recommended by the board if made binding.

“(Biggest shareholder) James Packer is being given the boot; at least his wallet won’t be looking too thin if the deal is closed,” Mr Tchourilov said.

“Crown was trading down at $8.60 only six months ago after a royal commission into rife corruption and organised crime within the casino.”

Mr Tchourilov noted Crown’s share price was still sitting below Blackstone’s offer, saying investors were sitting tight for a binding agreement before closing the valuation gap.

While the tech sector as a whole was in the red, Archer Materials skyrocketed 32.04 per cent to $1.36 after providing a progress update on its “lab-on-a-chip” technology, saying it intends to use graphene as an ultrasensitive sensor for detecting and analysing diseases.

Artificial intelligence company Brainchip Holdings soared 17.65 per cent to $1.40, two days after copping a speeding ticket from the ASX.

The company then explained it had issued a press release – not lodged on the local bourse – announcing US-based Information Systems Laboratories was developing an AI-based radar research solution for the Air Force Research Laboratory based on Brainchip’s Akida neural networking processor.

Skin and hair care products maker BWX, which owns brands including Sukin, tanked 15.14 per cent to $3.70 after announcing an “orderly leadership succession”.

Healthcare company Polynovo pulled back 10.08 per cent to $1.65 after strong gains in recent trading sessions on the back of record US sales.

Buy-now-pay-later provider Afterpay also gave up gains, declining 1.3 per cent to $75.99 after jumping 5 per cent on Wednesday following final regulatory approval for its takeover by US tech giant Block, formerly known as Square.

ANZ appreciated 1.3 per cent to $28.40, Commonwealth Bank dropped 0.11 per cent to $101.15, National Australia Bank added 1.13 per cent to $29.57 and Westpac firmed 0.28 per cent to $21.73.

The Aussie dollar was fetching 72.89 US cents, 53.13 British pence and 63.67 Euro cents in afternoon trade.