Iron ore optimism pushes ASX to three-day winning streak

A rally in material stocks helped push the benchmark into the green, as investors awaited fresh inflation data due Wednesday evening.

Australian shares extended their winning streak on Wednesday, as iron miners rallied on an improved outlook for the key steel making ingredient.

The benchmark index, the S&P/ASX200, added 0.3 per cent, or 24.3 points, to reach 7848.5 points.

Eight of 11 industry sectors finished in the green.

The broader All Ordinaries had a stronger showing, climbing 0.4 per cent.

The Australian dollar slipped against the greenback, buying US66.23c at the closing bell.

All eyes were on US inflation data, scheduled for release at 10.30pm AEST, with traders watching to see if the recent run of hotter-than-expected consumer prices continues.

Traders awaited fresh consumer price data for clues on the path of rate cuts. Picture: NCA NewsWire/ Gaye Gerard

Evidence that inflation is proving more stubborn than originally anticipated will likely reinforce doubts that the Federal Reserve will cut interest rates as quickly or as deeply this year as it has previously indicated.

“We’ve had two hot CPI numbers, we cannot afford a third one,” IG Australia market analyst Tony Sycamore said.

“My gut feel is we are going to get a better number or a number in line with expectations … I think that’s enough to keep in place expectations of Fed rate cuts and keep the uptrend in place for US stock markets.

“But if we get another hot number tonight then US equity markets are not going to like it and the bond market will be particularly unhappy.”

Tracking gains in the iron ore price, which traded on the Singapore Exchange at $US106.75 per tonne on a brighter outlook for consumption, Rio Tinto added 1.9 per cent to $127.75 as it announced it would invest $14.4m in start-up accelerator Founders Factory.

Iron ore futures advanced on the Singapore Exchange amid renewed optimism for increased demand in the commodity. Picture: Supplied.

Fellow iron ore miners also rallied, with BHP adding 0.7 per cent to $45.46 and Fortescue jumping 1.9 per cent to $25.74.

“April and May are China’s busiest period for construction,” ANZ analysts Brian Martin and Daniel Hynes said in a note to clients.

“Output from some blast furnaces is already starting to pick up in anticipation. Inventories at Chinese ports have also fallen slightly in recent weeks.”

Elsewhere on the benchmark, the real estate sector was the best performing, climbing 1.2 per cent.

Goodman Group added 1.6 per cent to $32.33, Scentre climbed 1.2 per cent to $3.34, while Lendlease jumped 2.3 per cent to $6.56.

Meanwhile, healthcare stocks also pushed higher, led by sector heavyweight CSL which gained 1.2 per cent to $283.37.

Interest rate sensitive tech stocks were the biggest laggards, sliding 1.2 per cent, with Wisetech off three per cent to $89.17, and Xero 1.2 per cent lower to $122.20.

In corporate news, shares in Whitehaven Coal advanced three per cent to $7.58 as private equity firm Vanguard bolstered its stake in the company.

Perseus Mining shed 2.6 per cent to $2.27 after its $270m takeover bid for Canada’s Silvercorp Metals for gold hopeful OreCorp was accepted. Shares in OreCorp slipped 0.4 per cent to 57c.