Inflation slows to 3.4pc in November, according to CPI data
The Australian sharemarket rose on Wednesday, as a softer-than-expected inflation report and surging metal prices bolstered the mining sector.
The benchmark S&P/ASX 200 Index closed 12.8 points higher, or 0.2 per cent, to 8695.60, after the monthly consumer price index unexpectedly cooled to 3.4 per cent in November.
That result was better than many had feared, helping to ease fears about an imminent interest rate hike. Bond traders now imply a 32 per cent chance that the Reserve Bank will lift the cash rate to 3.85 per cent at its first policy meeting of the year on February 3, down from 37 per cent before the data release. Markets, however, are still fully priced for a move higher by June.
Even so, Capital Economics is sticking to its views of a February rate hike.
“It’s probably still too strong for the RBA’s liking,” said Marcel Thieliant, head of Asia Pacific at Capital Economics. The central bank aims to return inflation to 2.5 per cent. “With little spare capacity left in the economy and the labour market still tight, there’s therefore a strong case for the RBA to start tightening policy again before long.”
On the ASX, of the index’s 11 sectors, eight ended in positive territory, led by tech and materials.
The mining sector climbed after another record rally in London base metals overnight on concerns of tighter supply. Copper crossed above $US13,300 a tonne for the first time, and nickel soared 7 per cent.
That helped lift the mining giants, with BHP rising 1 per cent to $47.70, while Rio Tinto jumped 1.6 per cent to $154.73, extending Tuesday’s rally. Great Southern Copper leapt 4.4 per cent to $3.34.
Gold miners were also on a tear after the precious metal climbed above $US4495 an ounce. Newmont gained 2.8 per cent to $155.50 and Evolution Mining advanced 1.3 per cent to $12.99. Capricorn Metals rallied 1.9 per cent to $14.84 on news it was on track to produce at the upper end of its FY26 guidance.
The metals’ surge propelled the Australian dollar to a 14-month high of US67.52. The Aussie is sensitive to commodity prices because Australia is a major global exporter of natural resources, including iron ore, gold, and copper.
The rare earths sector was also on fire after China banned exports of dual-use items, including certain rare earth elements essential for making drones and chips, to Japan.
Dual-use items are goods with both civilian and military applications.
Lynas was the stand-out, soaring 14 per cent to $15.06, as it posted the best one-day gain since July.
But energy stocks were the day’s biggest drag, tracking a fall in oil prices after Donald Trump announced Venezuela would “turn over” up to 50 million barrels of crude to the United States. The US president’s comments follow the recent toppling and capture of the Venezuelan leader, Nicolas Maduro.
Both Brent and West Texas Intermediate dropped more than 1 per cent, sending Woodside 2.8 per cent lower at $22.86. Santos shaved off 3 per cent to $5.92.
Stocks in focus
In corporate news, 4D Medical soared 12 per cent to $4.69, after hitting a record high on news the US San Diego Health had started the clinical use of its CT:VQ respiratory technology.
And, 3D Energi jumped 13 per cent on news its partner ConocoPhillips may have found one of the largest clusters of gas deposits in the Otway Basin off western Victoria.
