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Gold, miners help ASX shares beat US lead

·3-min read

Improving appetite for gold and mining shares in response to inflation and Chinese activity has helped the ASX close higher.

Gold stocks rallied after higher UK inflation figures were published overnight, while miners slowly improved as hope emerged for China's beleaguered property industry.

Gold miner Evolution enjoyed both benefits and jumped almost 10 per cent after buying a Queensland mine from Glencore for $1 billion.

Gold mining rivals Newcrest and Northern Star each gained more than one per cent as investors raised the spot gold price as high as $US1871 per ounce.

The gold rush comes after UK inflation reached a 10-year high of 4.2 per cent.

Gold is viewed as a safe haven asset that better retains its value against forces such as inflation.

Shaw and Partners chief investment officer Martin Crabb said a lesser contributor may have been reports US President Joe Biden will soon decide whether to give Federal Reserve chair Jerome Powell a second term.

Fed Governor Lael Brainard is a contender who Mr Crabb said could have implications for gold.

"She is seen as someone who would be pro-inflation, more so that Powell," Mr Crab said.

"So precious metals traders say Brainard would be positive for gold."

Meanwhile mining shares improved to modest gains and helped improve the indices.

Mr Crabb said there was talk that property developers in China, major buyers of Aussie materials, will be allowed to resume issuing asset-backed securities to cover debts.

Chinese property giant Evergrande is battling to pay debts and others are wary of being caught in any collapse.

Investors lifted BHP and Rio Tinto shares by less than one per cent. They sent Fortescue shares lower by 1.6 per cent.

Property and healthcare shares were the best performers.

Sonic Healthcare gained three per cent after underlying earnings improved 16 per cent in the first four months of the financial year.

Coronavirus testing helped sales rise five per cent to just over $3 billion.

The benchmark S&P/ASX200 index closed up 9.3 points, or 0.13 per cent, to 7379.2 points.

The All Ordinaries closed higher by 9.2 points, or 0.12 per cent, to 7713.2 points.

Treasury Wine Estates will buy a US vineyards company for about $433 million.

Frank Family Vineyards is based in California and mostly sells chardonnay along with cabernet sauvignon, pinot noir and sparkling wine.

Treasury has recently sold some US brands for $300 million as it targets the luxury end of the US wine market.

Shares were up 2.58 per cent to $11.54.

In banking, there were losses for each of the big four. ANZ and the Commonwealth lost a little more than one per cent.

Gaming operator Aristocrat Leisure had a 40 per cent slide in full-year profit after a tax asset lost value from the previous year.

Net profit after tax was $820 million for the year ended September 30.

Shareholders will receive a fully franked final dividend of 26 cents per security. This is better than the equivalent payout last year of 10 cents per security.

Shares were down 4.77 per cent to $45.09.

The Australian dollar was buying 72.75 US cents at 1724 AEDT, lower from 72.82 US cents at Wednesday's close.

ON THE ASX

* The benchmark S&P/ASX200 index closed up 9.3 points, or 0.13 per cent, to 7379.2 points on Thursday.

* The All Ordinaries closed higher by 9.2 points, or 0.12 per cent, to 7713.2 points.

* At 1724 AEDT, the SPI200 futures index was up four points, or 0.05 per cent, at 7371 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 72.75 US cents, from 72.82 cents on Wednesday

* 83.09 Japanese yen, from 83.74 yen

* 64.27 Euro cents, from 64.52 cents

* 53.92 British pence, from 54.30 pence

* 103.46 NZ cents, from 104.11 cents.

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