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Miners lead Australian share market surge after Trump win

Thursday, 10 Nov 2016 07:49:02 | Michael Janda

The ASX has rebounded from a steep fall yesterday. (File photo: Reuters TV)

The Australian share market has rebounded from being as much as 4 per cent lower yesterday to a 3 per cent-plus gain today as investors take an optimistic view of a Trump presidency.

Echoing an extremely rare rebound on US markets - which went from a 5 per cent fall in futures trade to an eventual gain of 1.1 per cent - Australia's benchmark ASX 200 index had jumped 3.1 per cent to 5,314 by 10:37am (AEDT).

The gains were led by the companies that suffered most on Trump pessimism yesterday afternoon.

The major mining companies, BHP Billiton and Rio Tinto, were up 8.5 and 7.9 per cent respectively, while Fortescue was up nearly 10 per cent to $5.93.

Traders have shifted their focus away from the risks of an economically damaging global trade war potentially being sparked by Mr Trump, to the possibility of increased US infrastructure spending boosting growth, inflation and demand for commodities.

The big four banks have also posted strong rebounds, with Westpac up nearly 4 per cent to $30.84 and the other three majors also posting gains above 3 per cent.

Even domestic-focussed stocks are rallying, with Woolworths, Wesfarmers and JB Hi-Fi all up more than 2 per cent, and Telstra up 1.3 per cent.

The only real losers on the ASX today are gold miners, which have given up all of yesterday's initial Trump-inspired boom, with a bust now that traders are taking a more benign view of the president-elect.

Newcrest was down 6.4 per cent to $23.73, while smaller rival St Barbara was off a dramatic 9.8 per cent to $2.66.

Spot gold prices have gone from around $US1,320 an ounce late yesterday afternoon to $US1,275 an ounce this morning on the prospect of higher inflation and increased bets on US interest rate rises.

However, the Australian dollar has held fairly steady after a big drop on the Trump victory, and was worth 76.4 US cents by 10:47am.

AustraliaPlus


 

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