Australian share market reaches 10-month high as Rio shares jumps to record price

The Aussie share market climbed to its highest level since February 10 on Tuesday, as material and energy stocks helped drive the benchmark higher.

The Australian share market advanced on Tuesday as energy and materials stocks propelled the benchmark to its highest level since February 10.

By the close of trade, the S&P/ASX200 had added 0.8 per cent, or 62.7 points, to 7489.1.

Meanwhile, the broader All Ordinaries finished up 0.9 per cent to 7715.9.

The Australian dollar also finished higher to buy US 67.17c. Since October, the “Aussie” has risen by roughly US 4c against the greenback.

All thirteen industry sectors finished in the green, even as the Reserve Bank signalled that it had considered hiking the cash rate to 4.6 per cent at its December 5 meeting before ultimately opting to keep rates steady.

Markets shrugged off a more hawkish statement by the RBA which warned of further tightening of monetary policy in the months ahead. Picture: NCA Newswire

Despite the RBA warning further tightening might be required to keep inflation in check, KCM Trade chief market analyst Tim Waterer said the “feel good story” for equities in the run up to Christmas had continued.

“The central bank doesn’t seem in a rush to raise rates again, which provided some comfort to the market,” Mr Waterer said.

While investors were closely watching fresh quarterly inflation data, due January 31, recent data flows suggested the RBA had finished its tightening cycle, Mr Waterer added.

“Looking at some of the metrics that are coming in so far, we’re not expecting any nasty surprises at this point in time.

“When you look at what the GDP figures were, where retail sales are, with unemployment ticking higher, the macro data is trending to the point where we are looking at a likely hold in February.”

While bond markets are implying just a four per cent chance of a hike to 4.6 per cent at the RBA’s February meeting, expectations of the first rate cut have been delayed from June to August.

On the commodities front, ASX-listed energy stocks climbed one per cent following a two per cent increase in crude oil prices overnight. Supply fears have reignited following the attacks on container ships and oil tankers in the Red Sea by Yemen-based Houthi rebels.

Sector heavyweight Woodside added 1.7 per cent to $31.01.

The materials sectors also finished higher, with the frenzy of merger activity continued.

Iron ore miners defied a dip in the price for the commodity on the Singapore exchange, with shares in Rio Tinto adding 0.7 per cent to $134.24 — their highest ever — while Fortescue also reached a record high of $28.18 during early trading before finishing at $28.09, up 0.3 per cent.

Rio Tinto reached a record high on Tuesday even as price for iron ore on the Singapore exchange fell to about $US132 a tonne. Picture: NCA NewsWire / Sharon Smith

In company news, Origin Energy upped its stake in British renewable energy group Octopus Energy with a $530m investment. Shares for the local energy retailer added 3.2 per cent to $8.28.

Investors in Australia lithium chemicals producer Allkem voted in favour of a $10.6bn merger offer lobbed by US giant Livent, which is set to create the third largest producer of the commodity in the world. Despite the approval, shares shed 0.6 per cent to $10.59.

AGL Energy rose 0.6 per cent to $9.14 after it said it had reached a final investment decision to develop a 500MW battery at its Hunter Energy Hub in NSW — the site of the former Liddell coal fired power station which ceased operations earlier this year.

Azure Minerals climbed 1.7 per cent to $3.69 after it revealed it had received a revised takeover offer worth $3.70 a share from Chile’s SQM and Gina Rinehart’s Hancock prospecting. The pair had previously offered the lithium miner $3.52 per share.

Telix Pharmaceuticals jumped 2.4 per cent to $9.79 following the submission of a licensing application to US Food and Drug Administration to further develop an imaging agent to help treat kidney cancer.