Australian shares experienced a significant rally on Wednesday as the country’s annual inflation rate unexpectedly slowed to a 13-month low.
This development raised hopes that the Reserve Bank of Australia would maintain interest rates at 4.1%.
The S&P/ASX 200 surged by 1.1% or 78.3 points, marking its largest daily gain since April.
Likewise, the All Ordinaries index increased by 1.2% to reach 7384.1 points. The positive market performance was primarily driven by the lower-than-expected inflation data, which reported a 5.6% annual rise in May instead of the projected 6.1%.
Shareholders responded positively, resulting in a 2.1% increase in consumer discretionary stocks and real estate.
Of the 11 sectors in the index, 10 registered gains, while utilities remained unchanged.
Futures
The Dow Jones futures are pointing to a fall of 9 points.
The S&P 500 futures are pointing to a fall of 6.75 points.
The Nasdaq futures are pointing to a fall of 46.75 points.
The SPI futures are up 95 points.
Best and worst performers
The best-performing sector was Consumer Discretionary, up 2.14 per cent. The worst-performing sector was Utilities, down 0.01 per cent.
The best-performing large cap was Ramsay Health Care (ASX:RHC), closing 4.77 per cent higher at $57.31. It was followed by shares in Meridian Energy (ASX:MEZ) and IDP Education (ASX:IEL).
The worst-performing large cap was SEEK (ASX:SEK), closing 1.39 per cent lower at $21.21. It was followed by shares in Lynas Rare Earths (ASX:LYC) and Northern Star Resources (ASX:NST).
Asian markets
Japan’s Nikkei has gained 1.91 per cent.
Hong Kong’s Hang Seng has lost 0.01 per cent.
China’s Shanghai Composite has gained 1.65 per cent.
Company news
Raiden Resources (ASX:RDN) has entered into a transaction to acquire an 80 per cent interest in the Welcome Exploration tenements. These are located in the Pilbara region of WA. Dusko Ljubojevic, MD of Raiden, commented: “With credit to Raiden’s management team, the company has managed to secure prospective ground immediately adjacent to one of the most exciting lithium discoveries this year.” Shares closed 28.57 per cent higher at 0.9 cents.
Encounter Resources (ASX:ENR) has identified carbonatites over 3.5km of strike in the West Arunta region of WA. MD Will Robinson said: “Both holes contain zones of shallow oxidised and fresh carbonatite that returned anomalous niobium-REE on a handheld pXRF.” Shares closed 22.6 per cent higher at 32.5 cents.
Stellar Resources (ASX:SRZ) has intersected massive sulphides of zinc, lead and copper at the company’s North Scamander project in Tasmania. Executive Director, Gary Fietz, commented: “The significant Zn-Pb-Cu mineralised zone intersected to date… is very encouraging as this is interpreted as being the top of a metal-rich hydrothermal system which may exist at depth”. Shares closed 30 per cent higher at 1.4 cents.
Commodities and the dollar
Gold is trading at US$1,924.50 an ounce.
Iron ore is 4.1 per cent higher at US$113.95 a tonne.
Iron ore futures are pointing to a 1.78 per cent rise.
Light crude is trading $0.46 higher at US$68.16 a barrel.
One Australian dollar is buying 66.49 US cents.