ASX is rising on material gains and a possible slowdown in US inflation

The Australian stock market rose on Monday morning as several key metals prices rose and after Wall Street closed with broad gains on Friday on hopes inflation and interest rates may ease.

The S&P/ASX200 was up 68.3 points, or 1 percent, to 7,177.9 at market open on Monday, helped by the real estate and materials sectors.

Australia's stock market climbed Monday, buoyed by the materials and property sectors.

Australia’s stock market climbed Monday, buoyed by the materials and property sectors.Credit:NYSE

Core Lithium was one of the top lifters, gaining 8.56 percent after announcing it would be moving its headquarters to Perth, and battery metals company Liontown Resources was up 8.3 percent. Gold and iron ore prices rose, although Fortescue fell 0.1 percent after its longtime chief financial officer, Ian Wells, resigned.

Health care was the only sector down, slipping 0.1 percent as share transfer company Computershare fell 3.4 percent and power generator Mercury NZ fell 1.2 percent.

On Wall Street, stocks rebounded after a shaky start on Friday as some mixed data on the US economy fueled Wall Street hopes that inflation is cooling further and the Federal Reserve could ease its rate hikes.

The S&P 500 rose 2.3 percent, marking its first week of gains in the last five. The Dow Jones Industrial Average gained 2.1 percent and the Nasdaq Composite gained 2.6 percent. Small company stocks also rose, pushing the Russell 2000 Index up 2.3 percent.

Markets around the world received an initial boost from the US labor market report. On the positive side, she saw workers’ wage growth slowing, which could mean that pressure on the country’s high inflation is easing. On the other hand, it also showed that sentiment across the labor market might still be too strong for the Fed’s liking, even after last year’s volley of rate hikes.

Analysts warned that trading could remain turbulent in the hours and weeks ahead as investors continue to try to prevent whether the economy can avoid a recession. Much of the trading is based solely on expectations of what the Fed will do with rates: high rates slow the economy and aim to dampen inflation, but can cause a recession and drag down the prices of all types of investments .

Investors reacted most sharply in the bond market, where the two-year Treasury yield fell to 4.3 percent from 4.5 percent just before the US jobs data.

https://www.smh.com.au/business/markets/asx-lifts-on-gains-in-materials-and-possible-us-inflation-cooling-20230109-p5cb82.html?ref=rss&utm_medium=rss&utm_source=rss_business ASX is rising on material gains and a possible slowdown in US inflation

Brian Lowry

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