A strong rebound in banking stocks has put Australia’s share market on track for its best day in a month, with oil prices fading on reports the fragile US-Iran ceasefire will hold.
The S&P/ASX200 rose 102.1 points on Wednesday, up 1.18 per cent, to 8,782.6, as the broader All Ordinaries gained 100.9 points, or 1.13 per cent, to 9,004.2.
“Despite the shots fired in the Strait of Hormuz by the US and Iran as each tries to assert its control over the strait, the tenuous ceasefire continues to hold,” Capital.com senior market analyst Kyle Rodda said.
The news was music to the ears of airline shareholders, with Qantas and Virgin Australia rebounding more than two and four per cent, respectively.
Six of 11 local sectors were trading higher by lunchtime, while energy stocks and consumer staples fell as investors took profits on defensive positions.
Australia’s banks led the broader charge higher with each of the big four banks up between 2.7 per cent and 4.7 per cent by lunchtime.
ANZ, NAB and Westpac reclaimed their post-interim earnings sell-offs with interest, ahead of Commonwealth Bank handing down its third-quarter results next week.
Basic materials gained 0.9 per cent, led by mega miners BHP and Fortescue as iron ore futures jumped to 20-month high near $US110 a tonne.
Mixed miners, battery minerals and rare earths producers also clawed back some recent losses as global growth hopes turned upward.
Gold miners weren’t so lucky, despite an uptick in the underlying asset to $US4,625 ($A6,400) an ounce, as Evolution and Northern Star swung into the red.
The Australian dollar was trading at its highest level since June 2022, buying 72.30 US cents and up from 71.44 US cents on Tuesday at 5pm.
The Aussie swung higher on improving risk sentiment, and after the Reserve Bank majority call to lift the cash interest rate to 4.35 per cent on Tuesday raised expectations that rates will be higher for longer.
Against a backdrop of already sticky inflation, the RBA decision stood in contrast to other central banks and marked a pivot from being a historical laggard to a first mover, Vanguard senior economist Grant Feng said.
“In 2026, tighter monetary policy, fading fiscal impulse, and rising energy costs are combining to create a materially less supportive macro backdrop,” Dr Feng said.
“This reinforces our more cautious view on the domestic outlook relative to consensus.”
The local real estate sector shrugged off Tuesday’s rate hike to surge 1.3 per cent, continuing to rebound from its 25 per cent sell-off since November.
A more than six per cent dump of JB Hi-Fi shares weighed on consumer cyclicals, as an “increasingly uncertain retail environment” overshadowed March quarter sales growth.
In other company news, toll road company Atlas Arteria gained 0.5 per cent as its board rejected IFM Investors’ takeover bid, calling it too low and opportunistic.
