Bourse closes in on record high as Fortescue reaches fresh peak

Australian shares continued to advance on Thursday as a rally in the materials sector pushed the benchmark to close just 14.6 points below its record high.

The Australian share market continued to close in on its record high on Thursday as a positive lead from Wall Street and a rally in the materials sector pushed the benchmark higher.

At the closing bell, the S&P/ASX200 had added 0.7 per cent, or 53.1 points, to 7,614.3, while the broader All Ordinaries also added 0.7 per cent to 7,852.1.

The benchmark is now just 14.6 points away from hitting its record high of 7628.9.

Shares in BHP reached a record high as iron ore futures sat just above $US138 a tonne. Picture: AFP / William West

EightCap market analyst Zoran Kreskovic said markets had continued to benefit from a Santa rally in post-Christmas trading.

“We could actually break through an all time high over the coming days, which will generally be considered as a bullish move because we’ve had the resistance since 2021,” Mr Kreskovic said.

However, due to the lack of volume and liquidity in the market, Mr Kresovic said a pullback in the market wouldn’t happen immediately, but rather, in the coming weeks.

“It’s an opportunity [for investors] to top up more as we go into 2024 with more upside in January or at least within the first quarter,” he added.

Locally, 10 of 11 industry sectors finished in the green, led by tech, materials and consumer discretionary stocks which all added 1 per cent. The utilities sector was the worst performer, falling 0.6 per cent.

Iron ore miners continued their rally despite iron ore prices falling to $US138.05 per tonne. ASX heavyweight BHP rose to a record $50.84 intraday, before closing up 0.9 per cent to $50.72. Fortescue also reached a fresh record $29.15 intraday to later close up 2.1 per cent to $29.14. Rio Tinto added 0.9 per cent to $136.29.

Elsewhere in the materials sector, gold miners also rose after spot prices for the precious metal rose to a record high of $US2100 an ounce on a weaker US dollar. Northern Star Resources added 0.9 per cent to $13.86 and Evolution Mining climbed 1 per cent to $3.99.

Global crude oil prices retreated with the risk premium associated with attacks by Yemen-based Houthi rebels in the Red Sea beginning to dissipate. Global benchmark Brent Crude fell 1.8 per cent to $US79.58 a barrel.

Oil prices sank as shipping giants resumed transiting through the Red Sea. Picture: AFP / Christophe Simon

The Australian dollar climbed to a fresh five-month high of US68.71c during trading – its strongest level since July. Interest rate differentials between Australia and the United States have helped reverse steep losses in the local currency in early 2023. The AUD is now set to finish the year 0.5 per cent higher.

On Wall Street overnight, the S&P500 is also nearing an all time high, climbing 0.1 per cent to 4,781.58 in yesterday’s session.

Meanwhile, the US 10-year Treasury yield fell to 3.8 per cent - the lowest level since the end of July.

In company news, Eagers Automotive said in a statement to the ASX that it had launched an urgent investigation into a cyberattack on its IT systems, the impact of which was yet to be fully ascertained. Shares have entered a trading halt.

Woolworths added 0.9 per cent to $37.19 after Goldman Sachs analysts retained their buy rating and $42.40 price target for the supermarket giant’s share price.