Australia’s Stock Market Finished Higher, Bolstered by a Surge in Commodity Prices

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Due to China’s positive sentiment, iron ore and oil prices rose on December 30, marking the first weekly increase in Australian equities in five weeks.

The S&P/ASX 200 index recorded a 1% increase for the week, concluding 46 points or 0.7% higher at 7,109.6. On December 29, the index increased by 0.1%.

Iron ore and oil prices rose after China announced measures to bolster its struggling real estate market on Thursday, cheering global investors.

Despite a lousy session on Wall Street overnight, Australian markets continued the broad upward trend in Asian stocks, suggesting that the Federal Reserve may continue on its hawkish course despite signs of a tight labour market.

Yeap Jun Rong, a market analyst at IG, predicted that “overall risk sentiment could lean more towards wait-and-see in the lead-up to the U.S. job report later, lacking a clear conviction in the market direction from Wall Street over the past few days.”

However, advances in the iron ore, lithium, and gold mining sectors propelled a 3.3% increase in local mining equities.

The report claimed that “BHP Group, Rio Tinto, and Fortescue Metals Group all had gains ranging from 2.4% to 3.7%.”

Core Lithium and Liontown Resources, two lithium mining companies, increased by 8.6% and 8.3%, respectively, to rank among the top gainers on the benchmark index.

Following the rise in oil prices due to expectations of increased demand from China, energy stocks also increased by 1.6%.

Santos increased by 1.7%, while Woodside Energy increased by 2.1%. Days after rumours surfaced that China may resume importing coal from Australia, coal miners Yancoal Australia and Coronado Global Resources saw increases of 6.8% and 4.4%, respectively.

As Strike Energy claimed its offer was superior to Hancock Energy’s sweetened offer, takeover offers for Warrego Energy increased.

Overall, the gains in commodities and optimism over a potential trade deal supported the market and pushed Australian shares higher at the end of 2022.

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