Australian shares could be on track for their best day since the start of July, despite a surprise uptick in employment that may keep the pressure on the central bank’s inflation battle.
The benchmark S&P/ASX200 gained 52.5 points by midday on Thursday to be up 0.59 per cent to 8,875.3, as the broader All Ordinaries advanced by 50.8 points, or 0.56 per cent, to 9,055.7.
The top-200 index rose more than 100 points in early trade, before handing back almost half of those gains on new labour force data for June.
It showed employment swelled by 76,300 jobs in the month, which was roughly 50,000 more than expected, leaving the door open to further Reserve Bank interest rate hikes despite unemployment holding steady.
“Unemployment holding at 4.4 per cent for a second consecutive month confirms the jobs market remains tight and firms the prospect of one more rate hike this year,” VanEck senior portfolio manager Cameron McCormack said.
“With the economy close to full employment, the RBA has greater freedom to focus squarely on inflation without a cooling in the labour market.”
The statistics bureau will release June consumer price index data next Wednesday.
The Aussie dollar was buoyed by the prospect of higher interest rates, jumping from 69.96 US cents to as high as 70.20 US cents in the 10 minutes following the data release.
Still, the bourse remained on track for its best day since July 3, as materials continued their recent rebound, while financials, utilities stocks and real estate trusts also clocked solid gains.
The gold sub-index rose more than two per cent as the precious metal traded near $US4,119 ($A5,872) an ounce, after climbing above $US4,165 overnight.
BHP and Rio Tinto edged higher as copper clung to its recent gains, while iron ore futures continued to linger below $US99 a tonne.
Pure copper play Sandfire Resources was a standout, soaring more than five per cent in early trade after boosting its final quarter copper production by almost 40 per cent.
The heavyweight financials sector rose roughly 1 per cent, with Commonwealth Bank and NAB leading the big four banks higher.
Macquarie gained 0.3 per cent after CEO Shemara Wikramanayake announced her retirement after eight years at the helm, with head of banking and financial services Greg Ward to step up to the top job from November 6.
Energy stocks gained 0.6 per cent as uranium producers continued their recent upswing. In contrast, oil and gas producers were mixed despite crude trading at six-week highs, with a second-quarter report from Santos undershooting expectations.
In other company news, Stockland has appointed former GPT boss Robert Johnston as its new chair, effective after the company’s annual meeting on October 19.
Clinuvel Pharmaceuticals will slash its global workforce by up to a fifth as it restructures to focus on the US market.
The Australian dollar was buying 70.11 US cents, up from 69.95 US cents on Wednesday at 5pm.
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