Aust shares rally as sentiment improves

ASX signboards in Sydney
Mining, energy and financial stocks are Monday's best performers on the ASX. -AAP Image

Broad-based gains in mining, tech and financial stocks have helped the Australian share market rally nearly two per cent as investors shrugged off concerns about aggressive rate hikes by major central banks.

The benchmark S&P/ASX200 index closed 127.3 points higher, or 1.94 per cent, at 6706. The broader All Ordinaries climbed 131.2 points, or 1.94 per cent, to 6893.6.

Every sector ended higher, with the bulk of the gains concentrated in heavyweight mining, energy and financials.

Sentiment improved after Wall Street rebounded strongly on Friday and oil prices eased, tempering fears about aggressive monetary tightening by central banks to tackle a period of prolonged inflation.

"Expectations on where inflation might go from here has dipped a little so maybe their is hope that interest rates might not need to be raised quite as much as what markets have been pricing," CommSec market analyst Steven Daghlian said.

Investors still expect aggressive increases over the next few months but the peak may now be lower than previously estimated, somewhat easing worries of a global recession.

The sharp lift in the local market came from each of the 11 sectoral indices climbing.

The heavyweight financials sector was easily the best performer, with all the Big Four banks rising between two and four per cent. 

Suncorp also added to the heft after the country's second-largest insurer said it is reviewing options for its banking business which could include a demerger or sale. Its stock ended 3.6 per cent higher at $11.23.

Recently beaten-down mining shares recovered ground on expectation of a recovery in demand after Chinese President Xi Jinping pledged to take more effective measures to achieve his country's economic goals. China buys nearly three-quarters of Australia's iron ore.

BHP Group and Fortescue Metals both ended about 3.0 per cent higher, while Rio Tinto gained 2.4 per cent.

However, a slide in gold producers took off some of the sheen.

Evolution Mining shares slumped more than 21.9 per cent to $2.64 after the company cut its full-year output and warned of higher costs. It also dragged peers such as Newcrest, Regis Resources and Northern Star down between 4 and 12 per cent.

Energy stocks were well-placed as crude oil prices remain high and coal prices continue to rally. Woodside and Santos both rose more than 2.5 per cent, while Whitehaven Coal added 5.8 per cent to $4.78.

Technology stocks tracked gains on Wall Street, with ASX-listed shares of Block lifting 5.5 per cent to $103.80, while software firm Xero and Altium added 1.2 per cent and 1.8 per cent respectively.

Link Administration climbed 4.1 per cent to $3.84 after Canadian cloud-based software company Dye & Durham Ltd affirmed its takeover bid for the company, albeit at a lower price, reviving hopes for the stalled proposal.

Healthcare stocks had a strong run with Ansell, Nanosonics and Cochlear each climbing more than 3.0 per cent, while shares in biotech Imugene rocketed more than 45 per cent to 24 cents after positive final results for its cancer immunotherapy drug.

Metcash shares jumped 4.1 per cent to $4.30 after the IGA Supermarkets owner and distributor posted a solid increase in full-year net profit and record sales revenue.

The Australian dollar was meanwhile buying 69.39 US cents at 1700 AEST, up from 69.03 US cents at Friday's close.


* The benchmark S&P/ASX200 index closed 127.3 points, or 1.94 per cent, higher at 6706 on Monday. 

* The broader All Ordinaries climbed 131.2 points, or 1.94 per cent, to 6893.6.


One Australian dollar buys:

* 69.39 US cents, from 69.03 US cents at Friday's close

* 93.71 Japanese yen, from 92.83 yen

* 65.61 Euro cents, from 65.57 cents

* 56.39 British pence, from 56.29 pence

* 109.86 NZ cents, from 109.71 cents