ASX gains on iron ore miners as investors await new US inflation data

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The Australian share market cautiously moved higher on Tuesday as investors held out for fresh inflation data from the United States that could guide the path of rate cuts.

At the closing bell, the benchmark S & P/ASX200 index advanced 0.5 per cent, or 35.1 points to 7,824.2, with seven of 11 industry sectors finishing in the green, while the broader All Ordinaries added a similar amount.

The Australian dollar was flat against the greenback, buying US66.06c.

Overnight on Wall Street, yields on two-, 10- and 30-year Treasuries rose to their highest levels in more than five months as investors queried how quickly the Federal

Reserve can move on rate cuts. Yields move inversely to bond prices.

TMS Capital portfolio manager Ben Clark said even as recent data flows had been firmer than anticipated, markets were becoming “more comfortable” that the timing of rate cuts were being pushed out.

“The trend has been that the economy has continued to surprise on the upside and that’s in a variety of different prints that we’ve seen of late,” Mr Clark said.

“Markets are getting a little bit more sanguine about rates … focusing a bit more on the strength of the economy versus the fact that rates are staying higher for longer.”

Locally, material stocks led gains, tracking a rally in iron ore futures which jumped 3.9 per cent to $US108.35 tonne for the May contract on the Singapore Exchange amid expectations of restocking by China’s steel mills.

Sector heavyweights rose with Rio Tinto jumping 3 per cent to $125.36, BHP adding 2 per cent to $45.13 and Fortescue climbing 1.6 per cent to $25.26.

Elsewhere in commodities, strong gains were also recorded. Copper prospector South32 advanced 1.6 per cent to $3.25, silver miner Manuka Resources vaulted 11.1 per cent to 9c, while lithium producer Liontown Resources surged 8.8 per cent to $1.30.

Financials also did much of the heavy lifting on the benchmark, rising 0.5 per cent, with the big four banks rising between 0.5 per cent and 1.2 per cent.

Interest rate sensitive real estate stocks were the worst performers, slipping 1 per cent. Goodman Group sank 1.1 per cent to $31.81, Mirvac lost 1.3 per cent to $2.29, and Charter Hall shed 2.3 per cent to $12.89.

In corporate news, agribusiness supplier Elders added 7.7 per cent to $8.00 after incurring heavy losses during Monday’s session.

Shares in Ansell jumped 6.5 per cent to $25.43 after exiting a trading halt. Responding to the announcement that the medical supplies company would purchase Kimberly Clark’s PPE business for $US640m ($974m), the company was upgraded by several analysts.

RiceGrowers, trading as SunRice, rose 1.9 per cent to $6.90, after the NSW state government proposed an extension of current vesting arrangements and the creation of new export agreement affecting a small component of its production.

Santos shed 2 per cent to $7.69 as its joint LNG venture located in Papua New Guinea faced further delays.

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