A rally among mining and energy businesses helped shares to their second straight day of gains as liquified natural gas producer Santos surged on reports Middle Eastern investors may lob a takeover bid.

On the day, the flagship S&P/ASX 200 rose 1.2 per cent or 92 points to 7831.9 points – its highest level since June 25. The broad advance followed another night of record highs for investors on Wall Street, as the tech-heavy Nasdaq Index and S&P 500 rose on bets the US Federal Reserve could cut interest rates this year.

The optimism pushed the Australian dollar to its highest level versus the greenback since January, as it bought $US67.1¢ at the closing bell.

In Japan, the flagship Topix Index hit a record high of 2900.1 to surpass a level last seen in 1989. The Japanese index has added 25.3 per cent over the past year as the yen’s tumbling value attracts overseas investors and improves the export earnings of Japanese conglomerates.

Elsewhere, the price of bitcoin fell another 4 per cent for the third straight day to $US58,540. The losses dragged the divisive token’s value down by more than 18 per cent over the past month.

Stock movers

The best-performing sharemarket sector on the day was materials. It jumped 2.3 per cent as iron ore futures traded in Singapore for settlement in July edged higher to $US113.50 a tonne. Iron ore heavyweight BHP gained 2.6 per cent to $44.77, with Rio Tinto gaining 2.6 per cent to $124.27.

The energy sector dominated by oil and gas businesses rose 1.8 per cent. Santos jumped 4.2 per cent to $8, after Bloomberg reported that Saudi Aramco and Abu Dhabi National Oil Co had separately studied bids for the liquefied natural gas (LNG) producer.

Ben Cleary, a portfolio manager at Tribeca Investment Partners, said the proposed interest from Middle Eastern investors could face some obstacles.

“Santos’ corporate appeal remains strong, having one of the better LNG growth pipelines in the Asia region,” Cleary said. “The right of first refusal at an asset level means the only way to control Santos LNG assets is via the headstock.

“And the Saudis will have to clear significant FIRB [Foreign Investment Review Board] issues one would imagine, but it highlights the lack of Tier 1 LNG projects in the Asia region and small concentration of owners outside of the large global exploration and production companies.”

Among green metals stocks, lithium bellwether Arcadium Lithium surged 5.5 per cent to $5.19 to claw back some heavy losses of this year. Iron ore and lithium heavyweight Mineral Resources jumped 4.8 per cent to $57.97.

Gold miners also advanced as the precious metal rose overnight to $US2357 an ounce. Newmont and Evolution Mining added more than 3 per cent each.

Elsewhere, shares in fund manager Magellan jumped 6.1 per cent to $9.07, after it flagged $19 million in performance fees and flat inflows for June.

Lendlease traded down 1 per cent to $5.64 after the competition regulator said it might oppose a deal the company struck to sell a business to Stockland.