Markets wrap: Mining and energy stocks boost ASX as investors cheer ‘peak inflation’

The Australian sharemarket rebounded on mining and energy names and the notion the US has reached “peak inflation” and consumer prices could soon start to ease.

Dwindling hopes of peace in Eastern Europe also sent the oil price higher, and companies such as Santos, Beach and Origin Energy along with it, while reports of additional Chinese stimulus boosted iron ore and mega miners Rio Tinto and Fortescue Metals.

Technology, property trusts and telco sectors remained in the red, but broad gains elsewhere helped the benchmark ASX 200 close 25 points, or 0.3 per cent, higher at 7479.0.

The broader All Ordinaries added 36.5 points, or 0.5 per cent, to finish the session at 7772.0, while the Aussie dollar eased from near 75 US cents to 74.39 US cents at the local close.

Market sentiment was further helped by the view that US inflation – which reached a fresh 40-year high overnight – may be at its peak, even though the US Fed remains hawkish on the interest rate outlook.

OANDA Asia-Pacific analyst Jeffrey Halley said year-through inflation may have peaked at 8.5 per cent, but the “perpetually bullish FOMO gnomes” were clearly looking to keep the party alive.

“(They) found it in the core inflation month-on-month data for March … (which) undershot forecasts, rising 0.3 per cent versus 0.5 per cent expected,” he said.

“That was all equity markets needed, using the singular data point to price in peak inflation in the US.”

The overnight rally faded after Federal Reserve President Lael Brainard said the central bank would move “expeditiously” to raise interest rates and get inflation back to 2 per cent.

But US futures nonetheless leapt higher in local trade to set Australian traders up for a positive session.

A rebound in the iron ore price back above $US155 a tonne also helped, according to City Index analyst Tony Sycamore, following reports Chinese authorities will again ease monetary policy to support their stagnant economy.

BHP finished up just 0.1 per cent at $51.78, but Rio Tinto surged 2 per cent to $120.50 and Fortescue Metals gained 0.8 per cent to $21.34.

Mineral Resources was another gainer – adding 4.5 per cent to $61.80 – while fellow lithium player Pilbara Minerals rose 2.1 per cent to $2.96, Core Lithium rose 12.4 per cent to $1.365, Allkem gained 3.8 per cent to $13.26 and Liontown Resources was up 4.1 per cent to $1.66.

Coal miner Whitehaven added 3.2 per cent to $4.54, Yancoal gained 5.8 per cent to $5.09 and Coronado leapt 7.1 per cent to $4.54 as the wider energy sector kicked higher.

A “dead end” in peace talks between Russia and Ukraine also contributed to the equation, with oil jumping more than 6 per cent.

This boosted the likes of Santos by 1.3 per cent to $8.10, Beach Energy by 1 per cent to $1.58 and Origin Energy by 1.2 per cent to $6.52.

Elsewhere, Commonwealth Bank lost 0.2 per cent to close at $106.55 and Macquarie Group sagged by 0.1 per cent to $202.94, but the rest of the big lenders rose.

Westpac ended 0.6 per cent higher at $24.29, NAB was up 0.4 per cent to $33.07 and ANZ added 0.3 per cent to $27.49.

Woolworths also gained 0.4 per cent to $38.26, Wesfarmers rose 0.9 per cent to $48.38, CSL climbed 0.4 per cent to $262.96 and Telstra finished the day 0.3 per cent higher at $4.03.

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