The Australian share market exhibited resilience on Thursday as it brushed aside a mixed response on Wall Street to fresh US inflation numbers released overnight. In a surprising turn of events, the S&P/ASX200 managed to climb 32.6 points through trading, equivalent to a 0.5 per cent increase, ultimately closing at 7186.5 points.
The broader All Ordinaries index mirrored this success, also rising by 0.5 per cent, concluding the day at 7382.7 points. This remarkable performance was driven by a number of factors that led to seven of the 11 sectors finishing in the green, with Materials and Financials achieving the strongest gains.
The Australian market’s ability to withstand the volatility emanating from Wall Street is a testament to its inherent strength and resilience. Investors remained cautiously optimistic despite mixed signals from overseas markets.
The iron ore price witnessed a significant surge as Singapore futures crossed the $US120 per tonne threshold, reaching a six-month peak. This valuable commodity has rallied impressively, boasting a growth of over 20 percent in recent months.
Notably, prominent iron ore mining giants demonstrated robust performance, with Rio Tinto registering a 1.8 percent increase, reaching $115.45 per share, while BHP experienced a 0.8 percent rise, reaching $44.14 per share.
The major banks also saw increases in their stock values, with gains ranging from 0.4 to 1.1 percent, led by NAB. Myer Holdings experienced a notable 1.6 percent rise in its shares following the company’s successful achievement of its sales and profit targets as revealed in its most recent full-year report.
In addition to this achievement, the department store giant also announced a final dividend of 1 cent. Furthermore, the August jobs report, released by the Bureau of Statistics, brought positive news as it indicated that an additional 64,900 individuals secured employment, surpassing economists’ expectations of 23,000 new jobs.
However, despite Australia’s rapidly growing population, the unemployment rate remained stable at 3.7 percent, as indicated by the seasonally adjusted data.
Tim Waterer, the chief market analyst at KCM Trade, noted that the August jobs data underscored the robustness of the labour market.
He also suggested that if this trend did not begin to abate, the Reserve Bank might contemplate implementing additional interest rate hikes.
“The employment figures for August highlight the ongoing strength of the job market, although it’s worth noting that the increase in part-time positions played a significant role in the overall statistics. However, it’s important to recognize that this level of job growth may not be sufficient to bring inflation back in line with the RBA’s target,” Mr Waterer said.
“Consequently, the possibility of additional measures by the RBA, such as interest rate adjustments, remains on the table between now and the end of the year.”
