The sharemarket rebounded on Wednesday, led by a rally in energy and mining stocks, as data showed Australia’s economy grew less than forecast in the first quarter, bolstering hopes of steady interest rates this month.
The S&P/ASX 200 Index gained 38.3 points, or 0.4 per cent, to 8758.2 at 11.45am (AEST), despite just three out of the 11 sectors trading higher.
Traders remained on alert about the fragility of a ceasefire between Washington and Tehran in April and assertions by US President Donald Trump in recent weeks that an agreement is forthcoming.
Brent prices rallied 1 per cent to $US97 a barrel on reports that Iran’s Revolutionary Guards Corps attacked US Fifth Fleet headquarters and an airbase and helicopters in a regional country using missiles and drones.
In Australia, data showed that the economy grew more slowly than analysts had forecast, supporting the case for a pause in the tightening cycle when the Reserve Bank of Australia meets this month.
Financial markets slightly pared back bets of a fourth rate rise. They now infer a 91 per cent chance of a move in December, down from 96 per cent before the data was released. The Australian dollar was steady at US71.78¢.
On the ASX, commodity stocks climbed. Santos rallied 1.1 per cent, while BHP hit a fresh high and Rio Tinto jumped 2 per cent, as copper continued its relentless rise.
Tech stocks were among the weakest as investors took some profit after recent gains, while financials were flat. Among the four big banks, only National Australia Bank was weaker, down 0.6 per cent. Commonwealth Bank, Westpac, and ANZ all inched up by 0.5 per cent.
Stock in focus
Superloop reversed earlier gains to be flat despite lifting full-year earnings forecast, pointing to strong trading conditions and the immediate impact of its recent acquisition of Lightning Broadband.
Ampol rallied 2.5 per cent as it received approval from the competition watchdog for its acquisition of EG Group Australia, after agreeing to sell off dozens of petrol stations.
Ingenia Communities Group leapt 4.6 per cent after confirming it is on track to deliver full-year profit at the top end of its target range, fuelled by a massive second-half land grab and resilient holiday bookings.
Maggie Beer leapt 4.7per cent after receiving an up to $10 million takeover offer for its Hampers and Gifts Australia business from an unnamed multinational consumer goods company.
The Lottery Corporation slipped 0.6 per cent despite lowering full-year operating expense guidance, citing strict cost discipline and a permanent reduction in its workforce.
Megaport extended its trading halt after announcing a $827.3 million rights issue to fund customer contracts, establish a GPU pool and support future growth opportunities.