Miners, industrials lead shares higher

Peter Trute
(Australian Associated Press)

Australian shares have hit a five-week high as high commodity prices, a Wall Street tailwind and adjusted expectations of local interest rate cuts helped near-across-the-board gains.

The benchmark S&P/ASX 200 index gained 1.3 per cent to 5,484.4 points, with industrial, energy and mining stocks the strongest performers.

On Wall Street overnight, the Dow Jones broke the 19,000 point mark on its way to another record high, setting the stage for a lift in the local market that was boosted by gains in iron ore and copper prices.

Fortescue Metals gained 18 cents to $6.30, it’s best price since July, 2011, Rio Tinto hit a 20-month high at $60.15, up $1.48; and BHP Billiton rose 67 cents to a three-month high of $25.91.

Steelmaker South32 hit a record after gaining almost six per cent to $2.88.

Morgans senior client adviser Bill Chatterton said gains were not just limited to materials stocks, with industrials, Telstra and real estate infrastructure trusts also posting strong gains.

“It seems to be a message on interest rates as well,” Mr Chatterton said.

Expectations of Australian interest rates staying low, off the back of sluggish employment and construction numbers, were making returns on infrastructure and REITs attractive, he said.

Mr Chatterton said the gains for commodity stocks such as BHP had a way to run yet, with iron ore looking to stay around the US$73 a tonne mark.

“All the commodities are going in one direction,” he said.

BHP and other Australian exporters were also benefitting from the recent strength of the US dollar, which is combining with rising commodity prices to boost Australian dollar returns.

Elsewhere in the market, Australian Agricultural Company dropped 4.5 cents to $1.70 after reporting a four per cent slip in half year profit to $47.9 million.

Labour hire group Programmed leaped eight per cent to $1.74 as it returned to profitability, posting a $3.7 million net profit for the first half of 2016/17.

And travel group Webjet soared 9.7 per cent to $10.48 after announcing a partnership for online room bookings with China’s largest travel aggregation business, Dida Travel Technology.

The big four banks all advanced with Westpac up 35 cents to $31.45, National Australia Bank up 31 cents at $28.81, ANZ adding 30 cents to $28.17 and Commonwealth Bank lifting $1.03 to $78.42.

Telstra added 10 cents to $5.00

KEY FACTS:

* At 1630 AEDT on Wednesday, the benchmark S&P/ASX 200 index was up 71.1 points, or 1.3 per cent, at 5,484.4 points.

* The broader All Ordinaries index was up 69.3 points, or 1.3 per cent, at 5,549.9 points.

* The December share price index futures contract was up 75 points at 5,496 points

* National turnover was 2.8 billion securities traded, worth $5.9 billion.

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