The S&P/ASX 200 rallied 56.50 points, or 0.70%, to 8,132.20 points at 10:32am AEST, while gold continues its run higher.
Nine of 11 sectors were higher in the final trading session for the week. Materials is the best performing sector, gaining 0.78% in early trading and 2.67% over the past five days.
Rate cuts are starting to be rolled out around the globe, buoying markets. The European Central Bank cut its rate by 25 basis points to 3.5%.
Trading Economics says this reflects growing confidence among policymakers that inflation is on a sustained downward trend.
August US producer price index data is generally in line with a cooling of inflation, despite coming in 0.1% higher than expected compared to July.
Gold hit a fresh record on Thursday, moving up to US$2,554 ($3,794) an ounce.
Trading Economics says this is largely driven by expectations of an upcoming Federal Reserve rate cut amid signs of a slowing US economy.
At the same time, initial US jobless claims rose by 2,000 to a seasonally adjusted 230,000.
“According to the CME FedWatch tool, markets now see a 71% probability of a 25-basis-point rate cut at the Fed’s meeting on September 17-18, with a 29% chance of a 50-basis-point cut,” Trading Economics says.
“A more accommodative monetary policy tends to favour gold by lowering the opportunity cost of holding non-yielding assets.”
Unsurprisingly, the gold miners dominated the top performers this morning. Emerald Resources (ASX:EMR) rose 7.38%, Perseus Mining (ASX:PRU) was up 6.8%, West African Resources (ASX:WAF) advanced 6.50%, Evolution Mining (ASX:EVN) climbed 5.94% and Gold Road Resources (ASX:GOR) shifted up 5.93%.
Among the bottom performing stocks was Arcadium Lithium (ASX:LTM), which slid 4.18%, and uranium producer Paladin Energy (ASX:PDN), which edged back 1.43% in early trade.
Over the last five days, the index has gained 1.48% and is currently 0.20% off of its 52-week high.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
