Strong commodities help Australia shares notch best week in seven

Strong commodities help Australia shares notch best week in seven

Australian shares advanced on Friday to post their best weekly gain in seven, as a jump in commodity prices boosted energy and mining stocks, while an overnight rebound in Wall Street also lifted risk appetite.

The S&P/ASX 200 index gained 0.5 per cent to close at 6,842.2 points, clocking a gain of 1.7 per cent for the week.

U.S. indexes rose in a late rally overnight as investors bought stocks likely to do well in the recovery in anticipation that the country’s economy grows at its fastest pace in decades this year.

In Australia, miners gained 1.2 per cent to mark their best session in two weeks, as Chinese ironore futures rose on improved demand.

Rio Tinto Ltd notched its best session in nearly three weeks while rival BHP Ltd gained 0.4 per cent.

“Commodity producers in Australia get paid in U.S dollars. We may be seeing a U.S dollar rally, which makes our miners very attractive,” said Brad Smoling, managing director of Smoling Stockbroking.

The U.S dollar traded near multi-month highs against most major currencies, supported by a wave of optimism over improving U.S. economic data and rising U.S Treasury yields.

Technology stocks took the cue from Wall Street peers to mark their best session in 10 days, with accounting software maker Xero Ltd gaining 4.1 per cent.

“Technology stocks in Australia is the NASDAQ, basically. You are going to see that sort of ripple effect in the sector,” Smoling added.

Shares of AMP Ltd closed 0.8 per cent higher after the embattled wealth manager rejected a media report that its chief executive was resigning.

While healthcare stocks fell 0.7 per cent to snap a four-day winning streak, they managed to post the best week in 11-1/2 months as an elevated U.S. dollar aided the export-reliant sector.

New Zealand’s benchmark S&P/NZX 50 index fell 0.3 per cent to close at 12,348.83 points. Energy retailer Mercury NZ was the top loser on the bourse.

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