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Australian stock market rallies on mining gains

Stock Rallies

Stock Rallies

The Australian stock market rallied on Monday, with the S&P/ASX 200 climbing 1.3 percent to 7,748.6 points. The gains were largely driven by a strong performance in the mining and banking sectors. BHP, one of the index’s biggest constituents, jumped 2.7 percent to $36.37.

Mineral Resources also had a strong showing, surging 8.2 percent to $18.04.

The rally in mining stocks was supported by a rise in iron ore prices, as hopes grew for a potential easing of trade tensions between the US and China. The big four banks all posted gains of more than 1 percent.

Commonwealth Bank led the pack, rising 1.7 percent to $157.29, while ANZ was up 1.6 percent to $30.51.

The market’s positive sentiment was bolstered by news that the Trump administration had published a list of electronics goods that would be temporarily excluded from import taxes. This included items such as computer hardware and smartphones.

Mining and banking drive rally

However, IG analyst Tony Sycamore cautioned that the market bounce could be short-lived.

He warned that investors might react strongly to economic data or company earnings results that reveal the impact of tariffs.

“A lot of the selling was flushed out [of the market] last week and in the absence of bad news, we have short-term relief,” Sycamore said. “But are the ASX 200 and the Nasdaq now going to retest their highs from February this year? I just can’t see it.”

In other market news, Neuren Pharmaceuticals was the index’s top performer, rallying 21.11 percent to $11.13.

The surge came after the US Food and Drug Administration approved the outcomes of a key drug trial, paving the way for final approval later this year. DroneShield shares also had a strong day, leaping 16.3 percent to $1.04. The company secured five repeat contracts worth $32.2 million from a close military ally of Australia in the Asia-Pacific region.

Australian Strategic Materials added more than a fifth of its value, soaring 21.8 percent to 47.5¢. The rise followed China’s decision to suspend exports on a range of critical rare earth metals, which investors see as potentially increasing demand for producers without operations in China.

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