Australian Shares Surge to Three-Week Peak

Fueled by gains in mining and banking sectors, Australian equities reached their highest level in three weeks on Wednesday. This surge was driven by increased optimism regarding a potential de-escalation in US-China trade relations, sparked by statements from US President Donald Trump indicating his willingness to negotiate with China. The S&P/ASX 200 index experienced a rise of 1.7%, climbing to 7948.7 by 0110 GMT, marking its highest point since April 2.

The benchmark index had remained unchanged on Tuesday. President Trump conveyed on Tuesday that he would adopt a “very nice” approach in discussions with China, Australia’s primary trading partner, suggesting that tariffs on Chinese imports would be significantly reduced following an agreement, though not entirely eliminated.

Furthermore, the president moderated his recent criticisms of Federal Reserve Chair Jerome Powell, a shift from his intensified attacks on the central bank head for not lowering interest rates, which in turn alleviated market anxieties.

Market Overview

The de-escalation received positive feedback from Wall Street, which then influenced the Australian markets, with all major sectors showing gains.

Sector Performance
  • Mining: BHP saw an increase of 2.9%, and Rio Tinto rose by 2.3%, contributing to a 0.2% rise in the sub-index, reaching its highest since April 1.
  • Financials: The financial sector advanced by 1.6%, marking its sixth consecutive session of gains and reaching its highest level in over a month earlier in the session. Investors gravitated towards banks, perceived as safer investments, to hedge against uncertainties related to Trump’s tariffs. Most of the “Big Four” banks saw increases between 2% and 2.9%, except for the Commonwealth Bank of Australia, which decreased by 0.7%.
  • Energy: Energy stocks rose by 4.3%, mirroring the increase in oil prices. Woodside Energy experienced a 3.3% gain after announcing a 13% year-on-year increase in quarterly revenue.
  • IT & Healthcare: IT firms increased by 3.1%, and healthcare stocks rose by 2.6%, reaching their highest in nearly two weeks.
  • Gold: Gold shares declined by 6.7% following a drop in gold prices after Trump softened his stance against Powell, and US Treasury Secretary Scott Bessent indicated a potential easing of trade tensions.

New Zealand’s S&P/NZX 50 index also saw an increase of 1.5%, reaching 12011.05 points by 0110 GMT.