Australian share market reaches eight week high following Wall St rally

A better-than-expected US inflation print overnight pushed the ASX to an eight week high.

The Australian sharemarket surged on Wednesday after fresh US inflation figures buoyed Wall St as traders’ fears of further rate hikes eased.

The S&P/ASX 200 index climbed 99.2 points, or 1.4 per cent, to reach 7105.9, its highest level in eight weeks.

The All Ordinaries fared slightly better, advancing 1.5 per cent despite fresh inflation fears at home following the highest quarterly wages print in 26 years. The Australian dollar is buying US65.05.

Wall Street surged overnight with the Dow Jones climbing 1.4 per cent, the S&P500 rising 1.9 per cent, and the tech-heavy NASDAQ surging 2.4 per cent. The rally came after a fresh annual US CPI print showed inflation had eased to 3.2 per cent in October, down from 3.7 per cent in September and August.

Treasurer Jim Chalmers welcomed the fresh wages data, which showed annual pay growth had reached its highest levels since 2009. Picture: NCA NewsWire / Martin Ollman

Locally on the benchmark, 10 of 11 industry sectors finished in the green, led by a rally in interest rate sensitive real estate stocks, which rose 4.6 per cent. Sector heavyweight Goodman jumped 3.4 per cent to $23.55, Stockland added 6.1 per cent to $4.03, and Scentre climbed 5.1 per cent to $2.70.

Iron ore miners also performed strongly following news that Beijing is considering another round of stimulus to assist the country’s ailing economic growth. Singapore futures for the commodity climbed above $US130 a tonne on the December contract.

Fortescue climbed 3.5 per cent to $25.18, BHP added 1.8 per cent to $46.84, and Rio Tinto rose 2.6 per cent to $125.61.

Following the latest wages data, which revealed pay growth had climbed to 4 per cent in the year to September, its highest level since 2009, economists said the jump in wages growth was likely a one-off.

“Looking forward, the 1.3 per cent lift in wages will not be repeated in the December quarter of 2023 given the timing of award wage increases is solely in the September quarter this year,” Commonwealth Bank economist Belinda Allen said in a note to clients.

Iron ore miners performed strongly after prices for the commodity on the December contract in Singapore climbed past $US130 a tonne. Picture: AFP / Amy Coopes.

“We expect the pace of wages growth to return to sub 1 per cent as indicators of the labour market suggest a degree of loosening.”

In company news, gaming giant Aristocrat fell 1 per cent to $39.48 despite announcing a net profit after tax of $1.3bn as a surge in revenue in the US made up for a decline in its Australia and New Zealand market.

Farm supplies producer NuFarm vaulted 8.1 per cent to $4.81 after posting better-than-expected full-year profit and revenue.

“We expect trading to remain challenging in the first half as the industry adjusts to a lower level of input cost and prices and for Nufarm to return to growth in the second half of fiscal 24,” the company said.

Lithium miner Allkem rose 5.8 per cent to $9.12 after the Foreign Investment Review Board approved its proposed $16 billion merger with Livent.

Originally published as Australian share market reaches eight week high following Wall St rally