ASX 200 bounces on renewed inflation hopes

Australia’s share market finished in the green on Tuesday, led by the major resources and property stocks, and a surprise report out of the US.

Australia’s stock market rose for the first time in four trading sessions as Donald Trump’s incoming economic team discusses slowly ramping up tariffs month by month, with the hopes of avoiding an inflation spike in the US.

The benchmark ASX 200 index gained 39.10 points or 0.48 per cent to close at 8231.00 points.

The broader All Ordinaries also grew by 39.90 points or 0.47 per cent to 8471.80.

The Australian dollar rose 0.1 per cent of 61.83 US cents, up from its near five year lows on Monday.

The ASX 200 rose on falling inflation fears. Picture: Newswire/ Gaye Gerard

Australia’s dollar and Asian equity markets traded higher after Bloomberg reported President Trump’s economic advisors were discussing a two to five per cent increase in tariff per month instead of a sudden spike one-off increase.

Commonwealth Bank associate director international economics and currency Carol Kong said the US dollar fell 0.4 per cent on these reports, alliveating some of the inflation fears.

“The gradual approach is reportedly aimed at boosting negotiating leverage and avoiding a spike in inflation,” she said.

On an overall positive day on Tuesday, eight of the 11 sectors finished in the green, led by the materials, energy and A-REITS.

Capital.com senior financial market analyst Kyle Rodda said Australian shares were continuing to benefit from stronger commodity prices.

“Energy stocks continued to outperform as oil prices hit a four month high as the markets price in tighter global supply dynamics following the latest US sanctions on Russian energy exports,” Mr Rodda said.

Fortescue rose 2.9 per cent to $18.50, BHP added 1.4 per cent to $40.16 and Rio Tinto rose 0.85 per cent to $119.80 as iron ore futures rose 1.6 per cent to $US100.60.

Whitehaven Coal soared 6.6 per cent, closing Tuesday at $6.45.

Eight of the 11 sectors in the ASX were trading higher. Picture: Newswire/ Gaye Gerard

The big four banks were the rare blip on the market Tuesday with three of them trading lower. ANZ was the only bank to finish in the green up 0.42 per cent to $29.02. Meanwhile Commonwealth Bank was the biggest faller, down 0.52 per cent to $151.96. NAB shares fell slightly by 0.11 per cent to $37.18 and Westpac is in the red down 0.22 per cent to $31.80.

In company news, Ingenia Communities was the strongest performing share on the ASX soaring 15.04 per cent to $5.20 after telling the market it will beat previous market estimates.

Star Entertainment once again had a double digit bounce in a see-sawing week for the embattled casino operator.

Shares fell more than 50 per cent at the end of last week on news the company is running out of money.

However, it has since bounced 13.63 per cent on Monday and a further 12 per cent on Tuesday.

“Star Entertainment continues to be a risk-taker’s delight, rising 12 per cent on whispers of a mystery buyer accumulating the stocks,” Mr Rodda said.

“The company remains basically on its knees. However, the interest from the purportedly Macau investor is raising hopes that the company can be saved despite its growing issues with liquidity.”

Originally published as ASX 200 bounces on renewed inflation hopes