Mining stocks climbed 1%, with iron ore miners dominating gains in the sector. Australian iron ore miners count China as a key destination for the export of the steelmaking commodity.
Australian shares hit record highs on Tuesday, powered by gains in financial and mining sectors, as optimism over a planned signing of a preliminary Sino-U.S. trade deal lifted investor spirits. As of 0055 GMT, the S&P/ASX 200 index rose 0.8% to 6,957.1.
Earlier in the session, the index touched an all-time peak of 6,961.20. The benchmark ended 0.4% weaker on Monday. Adding to the positive mood was news that the United States had dropped its designation of China as a currency manipulator. The widely expected decision came as a high-level Chinese delegation arrived in Washington ahead of Wednesday’s signing of a Phase 1 trade pact aimed at easing an 18-month-old tariff war between the world’s top two economies that has roiled financial markets. “It is more of a symbolic move showing that both sides will be willing to work with each other when it comes to trade … It does seem that trade relations are certainly warming up between the U.S. and China,” James Tao, a market analyst at CommSec said.
Mining stocks climbed 1%, with iron ore miners dominating gains in the sector. Australian iron ore miners count China as a key destination for the export of the steelmaking commodity. BHP Group and Fortescue Metals Group, the world’s fourth-largest iron ore miner, advanced over 1% each. Markets will also focus on trade figures for the Chinese economy due later in the day, which is expected to show an uptick in export and import growth.
Australia’s financial stocks climbed 0.7% to their highest since Dec. 17, 2019. The ‘Big Four’ banks gained between 0.1% and 1.1%. S&P Global Ratings on Monday said it expects a modest increase in credit losses for larger Australian banks after damaging bushfires in the country, which have led analysts to downgrade growth forecasts for the year. “The fires have not directly affected the major Australian cities, where the larger Australian banks generally have most of their home loan exposures,” S&P said in a note, adding that the full extent of the effect of bushfires on banks will not be known until to mid to late this year.
A stronger U.S. dollar lent support to export-reliant healthcare stocks, which jumped 1.4% to a record high. Sector heavyweight CSL Ltd added 1.8%, while domestic shares of San Diego-based Resmed Inc climbed 1%. Bucking the trend, gold stocks hit their lowest in more than a week as a broader risk-on sentiment sapped demand for the safe-haven bullion. New Zealand’s benchmark S&P/NZX 50 index rose 0.5% to 11,596.85. Drug retailer EBOS Group Ltd and market operator NZX Ltd were among the top boosts to the benchmark, rising between 0.8% and 2.2%, each.