Australian shares are rebounding sharply as markets digest the impact of a major shake-up in US politics that has brought crude prices back to earth.
The main S&P/ASX200 index jumped 155.8 points by midday on Thursday to be up 1.76 per cent to 8990.3, as the broader All Ordinaries gained 174.8 points, or 1.95 per cent, to 9129.7.
The rally followed a surge on Wall Street overnight, as tech stocks continued to tumble but other sectors advanced as investors weighed the impacts of a Democratic “blue tsunami” in the US midterm elections.
“The biggest moves in the market overnight were in the crude complex because of the implications of the US election, along with greater positivity about the prospect of peace talks between the US and Iran,” Capital.com senior market analyst Kyle Rodda said.
“We also saw significant shifts in commodities and interest rates that should support Australian markets today.”
The local raw materials sector rebounded by a massive 5.2 per cent, led by gold stocks as the precious metal jumped to $US4079 ($A5819) an ounce.
BHP and Rio Tinto each surged more than four per cent to $57.98 and $149.81 respectively, while investors also bought up beaten-down battery minerals and rare earths producers.
Energy stocks swung hard in the other direction, the segment down more than five per cent as Brent crude fell below $US94 a barrel for the first time since early September.
The slump came amid hopes of a timely resolution to the Iran war after US President Donald Trump and Vice President JD Vance attributed the Republican loss to the conflict and its impact on fuel prices.
Australia’s banks and defensive utilities stocks were not invited to the party, each segment down more than 1.5 per cent as their blue-chip companies sold off.
NAB was the worst of the big four banks, tanking more than seven per cent to $38.16, after its annual statutory net profit slumped 9.1 per cent to $6.14 billion in the year to September 30.
Local IT stocks came back with a vengeance, the sector up 7.6 per cent with help from a more than 40 per cent bounce in NextDC after an after-market share raid by companies including Goodman Group and US-based Digital Realty.
Recently neglected consumer discretionaries surged almost three per cent, while staples advanced a healthy two per cent.
Health care, real estate and communications stocks also performed well.
In company news, David Jones has collapsed into administration after 188 years after talks with its landlords failed, and some of its 37 stores in Australia and (one in New Zealand) could be on the chopping block.
The Australian dollar was buying 70.15 US cents, up from 69.83 US cents on Wednesday at 5pm.
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