ASX 200 edges higher as mining rally offsets banking and energy sector losses

A rally in resource stocks and falling oil prices helped the Australian sharemarket eke out a small gain during Wednesday’s trading.

The benchmark ASX 200 added 7.50 points, or 0.09 per cent, to close at 8765.30, while the broader All Ordinaries finished 5.20 points, or 0.06 per cent, higher to 8956.20.

The Australian dollar fell against the greenback, buying 70.96 US cents.

Just three of the 11 sectors finished higher, with a jump in the index heavy materials sector covering for falls across the board.

A rise in resource prices across the board helped lift the diversified miners with BHP rose 1.39 per cent to $62.07 and Rio Tinto added 0.79 per cent to $167.61.

Gold miners leapt due to a rising price for the precious commodity as Northern Star Resource climbed 3.97 per cent to $22.80, Evolution Mining jumped 2.20 per cent to $13.95 and Newmont rallied 3.01 per cent to $177.02.

Offsetting the gains from the materials sector was a mixed day of trading from the big four banks.

Commonwealth shares dropped 0.84 per cent to $151.05, Westpac slipped 0.43 per cent to $34.76, and ANZ fell 0.84 per cent to $37.83.

Bucking the trend was a rise from National Australia Bank, which eked out a 0.13 per cent gain to $38.66.

Overnight on Wall Street, the technology heavy Nasdaq hit a fresh high on Tuesday due to AI related businesses, while the S&P 500 traded just below a record high.

Global X investment strategist Justin Lin said Australia’s sharemarket traded flat due to a lack of AI businesses.

“As the AI trade roars back, the Australian market was flat today and is once again being held back by its limited exposure to the growth theme,” he said.

“Part of the reason materials may be outperforming despite the absence of any clear commodity catalyst is that the materials sector is increasingly becoming Australia’s closest proxy for the AI trade, as datacentre build out drives demand for industrial metals such as copper and aluminium.”

Meanwhile, oil prices slipped again on Wednesday to below US$100 ($A141) on the back of reports that Iran will reopen the Strait of Hormuz within seven days, if the United States backs off with its military pressure and removes the blockade on Iranian ports.