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Australia shares mark best day in three months on resources boost

09/29/2022 | 02:42am

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Commodities drive bourse higher

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ASX 200 marks best day in three months

Sept 29 (Reuters) - Australian shares jumped on Thursday, marking their best day in three months, driven higher by the commodities companies, while also tracking a rebound in global equity markets as the Bank of England took measures to stem a rout in its bond markets.

The S&P/ASX 200 index rose as much as 2% earlier in the day, before easing to finish the session 1.4% higher.

The British central bank launched an emergency bond-buying programme to calm the fixed income markets, after a government initiative to cut taxes triggered a massive sell-off in equities globally and a rally in the greenback.

However, investors continue to fret about the possibility of a global economic recession as central banks worldwide continue raising interest rates to control runaway inflation.

"So, things seem tentatively calm at the moment (after the BoE's actions), but that doesn't take away from the fact that recession calls are indeed getting louder," said Jessica Amir, a market strategist at Saxo Capital Markets.

Back in Australia, the commodity indexes led gains, with miners climbing the most, at 2.3%, tracking higher iron ore prices in top steel producer, China.

Sector bellwethers Rio Tinto, BHP Group and Fortescue Metals Group gained between 1% and 3%.

Gold stocks also shone bright on the benchmark, rising about 3.5%, with index majors Newcrest Mining and Northern Star Resources advancing 3% and 4.3%, respectively.

"I think the market is still not sure which commodities to lean on now. There are some doing well because the market thinks even in a recession they should play positively," said Mathan Somasundaram, chief executive officer of Deep Data Analytics.

The financial index traded 1% higher, with the "Big Four" banks firming in the range of 1.1% and 1.7%.

New Zealand's benchmark S&P/NZX 50 index rose 0.7% to finish the session at 11,200 points. (Reporting by Archishma Iyer in Bengaluru; Editing by Savio D'Souza)

Reuters 2022
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