Miners and banks ‘soften the blow’ for share market, lifting the ASX200 to a slight gain

James HallNCA NewsWire
Energy and financial sectors performed strongly on Monday. Gaye Gerard / NCA NewsWire
Camera IconEnergy and financial sectors performed strongly on Monday. Gaye Gerard / NCA NewsWire Credit: News Corp Australia

The Australian share market edged slightly higher on Monday, as mining and financial shares “softened the blow” following concerns of an interest rate hike and weak Chinese data.

Local shares burst out of the gates following a strong lead from Wall Street, but inflation data from New Zealand stoked fears central banks across the globe will be forced to lift rates.

The ASX200 rose 0.3 per cent, or 19.1 points higher, to close at 7381, buoyed by a broad gain for mining shares.

The materials, finance and energy stocks were the strongest sectors, up 10.4, 0.95 and 0.77 per cent respectively.

Nickel Mines was the strongest performing stock on the market, up more than 5 per cent, while Lynas Rare Earths, Oz Minerals, IGO and South32 all gained between 3.9 and 4.75 per cent, as the sector was boosted by a supply crunch.

IG markets analyst Kyle Rodda said this concern over supply meant “energy prices are rocketing higher”.

Oil prices have continued to rise, with Brent Crude up 1 per cent to $US84.86 a barrel and West Texas Intermediate up 1.2 per cent to $82.28.

“We’ve got this energy shortage emerging across the globe and what it basically means is not only are oil prices, natural gas prices and energy prices generally going higher, but it’s also impacting expectations for output,” Mr Rodda told NCA NewsWire.

“It’s softened the blow of that nervousness in the market because we’re obviously so heavily skewed towards miners and major energy stocks.”

Concerns over a future hike from the Reserve Bank of Australia and Federal Reserve in the US were compounded by the release of Chinese economic data around midday, revealing its “growth is weakening much faster than previously expected”, according to Mr Rodda.

But these lingering concerns have also served to benefit Monday’s better performing sectors.

“In this environment at the moment, the areas in the market we're seeing consistently perform quite well are energy and financials and that’s because both of them, more or less, benefit from disruption in global energy markets and the knock-on effect that has on interest rate expectations,” the IG market analyst said.

At the other end of the bourse, online retailer Kogan was the worst performing stock on Monday, shedding 4.6 per cent.

Domino’s Pizza lost 3.7 per cent after analysts flagged stock value concerns.

Information Technology fell 1.24 and was the worst performing sector on the market, with Afterpay losing 1.4 per cent, Xero down 1.9 per cent, and WiseTech Global losing 2.9 per cent.

Originally published as Miners and banks ‘soften the blow’ for share market, lifting the ASX200 to a slight gain

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