Australian equities stage recovery led by mining surge
November 12 (Reuters) – After enduring four consecutive sessions of decline, Australian stocks rebounded on Friday, buoyed by a surge in mining stocks following relief over China Evergrande Group’s avoidance of default and a lessening shock from unexpectedly robust U.S. inflation figures.
Closing 0.83% higher at 7,443, the S&P/ASX 200 index mitigated its weekly losses to a mere 0.2%.
Miners surged by 2.1%, emerging as the primary impetus for the benchmark index’s climb, fueled by a robust resurgence in iron ore prices on Thursday, culminating in a weekly addition of 5.2% to the index.
Major players in the mining sector, namely BHP, Rio Tinto, and Fortescue, witnessed gains ranging from 1.9% to 3.4% on Friday. BHP’s climate action agenda received shareholder endorsement on Thursday, following a confrontation with proxy advisory entities that had recommended shareholders oppose it.
In contrast, Greenland Minerals, although not indexed, plummeted by 29.6% as new legislation in Greenland banning uranium mining and halting development of the Australian rare-earths miner’s Kuannersuit mine posed a threat to its operations.
“The benchmark index is experiencing a resurgence fueled by an upturn in iron ore and copper prices, while drawing inspiration from the gains observed on Wall Street,” remarked Kunal Sawhney, CEO of equity research firm Kalkine Group. “It appears that investors have absorbed the disappointing October employment report, which cast doubt on the labor market’s recovery.”
Thursday’s data revealed a surprising decline in Australian employment for October, accompanied by a spike in the unemployment rate.
Financials registered a 0.6% increase but remained down by 0.6% for the week. Major financial institutions saw gains ranging from 0.04% to 0.9% on Friday.
Technology stocks ascended by 1.8%, contributing to the benchmark index’s upward trajectory, with industry giants Afterpay and Xero recording gains of 2% and 3%, respectively. This sector mirrored the overnight surge in the tech-centric Nasdaq.
New Zealand’s principal S&P/NZX 50 index experienced a 0.91% decline, closing at 12,908.15.