The Australian sharemarket rose on Thursday as investors continued to pull money out of the banking sector and into mining stocks, helping to send BHP to its highest level in a year.
The S&P/ASX 200 Index finished up 41.4 points, or 0.5 per cent, to 8861.70 by the close of trading with seven of the 11 sectors stronger, led by materials and healthcare.
BHP underpinned gains in materials as the world’s largest mining company jumped 2.6 per cent to $49.37 after hitting a 52-week high of $49.75 earlier in the session that sent its market capitalisation to just below $251 billion.
The stock has already rallied about 8 per cent this year as it taps into record prices for key metals including copper, silver, platinum and gold, driven by geopolitical uncertainty, supply concerns, and the prospect of a weak US dollar.
The miner is now within 2.3 per cent of overtaking Commonwealth Bank as the ASX’s largest company on the bourse.
MLC Asset Management portfolio manager Anthony Golowenko said the move reflects a broader reweighting on the index.
“We are definitely seeing a rotation. BHP isn’t as cheap as it was, but we still see robust cash flows and earnings, and a valuation correction in names like CBA,” the MLC portfolio manager said. “BHP and similar businesses are powering emerging Asia’s growth, and that’s looking quite strong.”
Shares of CBA reversed earlier losses to close up 0.4 per cent at $153.50 after a late rally in the banks, giving it a market cap of $256.86 billion. That marks a sharp reversal from June, when BHP was worth less than half as much as the bank.
Westpac added 0.6 per cent to $38.49, National Australia Bank 1.1 per cent to $42.36 and ANZ by 2.6 per cent to $37.32.
Rio Tinto climbed 0.4 per cent to $147.20 after the mining giant agreed to work with BHP to extract up to 200 million tonnes of iron ore at their neighbouring Yandicoogina and Yandi operations in the Pilbara.
South32 rose 4.6 per cent to $4.14, as copper traded at record levels.
Healthcare also enjoyed gains as CSL firmed 1 per cent to $175.28 and ResMed 2.4 per cent to $38.95, while technology was the main drag as Life360 dropped 5.1 per cent to $28.75 and Xero by 4.1 per cent to $103.16.
Short sellers have been increasingly targeting the ASX’s tech sector amid broader concerns about company valuations.
Stocks in focus
In corporate news, Treasury Wine Estates lost 4.9 per cent to $5.10 as Citi downgraded the owner of Penfolds to “sell” from “neutral”, warning that risks were skewed to the downside after fresh distributor uncertainty and a recent share price rally.
4DMedical rose 5.7 per cent to $4.53 after it completed a $150 million capital raising from institutions that priced the shares at $3.80 apiece amid strong demand for new and existing shareholders. The stock has jumped 700 per cent from a year ago.
And online used car dealership Carma dropped 7 per cent to $2. The company said it had delivered 244 vehicles in December, lifting quarterly deliveries to 746. That’s 29 per cent higher than a year earlier.
That’s a wrap on today’s news. Join us again soon for more live markets news.
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