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Energy, mining gains help lift ASX 0.3pct

·4-min read

The local share market has closed slightly higher, bolstered by strong gains for the mining and energy sectors ahead of key inflation data.

The benchmark S&P/ASX200 index on Tuesday finished up 17.4 points, or 0.26 per cent, to 6807.3, while the All Ordinaries finished up 18.8 points, or 0.27 per cent, to 7025.2.

"It's kind of like a steady as she goes, calm before the storm type of situation," Pepperstone head of research Chris Weston told AAP.

With two big events in the next 36 hours, traders are naturally hesitant to take on much risk, Mr Weston said.

Up first, Australian second-quarter inflation data will be released on Wednesday morning.

If consumer prices have risen higher than consensus expectations of 6.3 per cent, that increases the odds the Reserve Bank will opt for an unusually large interest rate hike on August 2.

Economists are predicting a rate hike of at least 50 basis points, but a 65 or 75 point hike is possible, especially if inflation comes in hotter than expected.

Then at 0400 AEDT on Thursday, the US Federal Reserve will announce the extent to which rates will rise in the world's largest economy.

A 75 basis point hike is widely expected, although Betashares chief economist David Bassanese told Ausbiz TV on Tuesday he saw a "small chance" the Fed would surprise markets with a 100 basis point rate hike.

In any case, although it was the third quiet day in a row for the ASX on Tuesday, the energy sector had its best day all month with a 2.8 per cent gain.

Whitehaven Coal climbed 6.4 per cent, Santos added 2.6 per cent and Woodside Energy rose 2.8 per cent.

The mining sector was up 1.6 as iron ore prices rose for a second day on a positive outlook for China's economy.

BHP added 2.5 per cent to $38.27, Rio Tinto advanced 1.9 per cent to $98.96 and South32 climbed 3.1 per cent to $3.67.

But Regis Resources fell 1.6 per cent to $1.575 after announcing higher mining costs in the June quarter, in part because of operational issues at its Duketon gold project in WA.

The big banks were mixed. Westpac added 0.4 per cent to $21.13 and ANZ gained 0.1 per cent to $22.64, while CBA fell 0.4 per cent to $96.73 and NAB dropped 0.5 per cent to $29.72. Also, Macquarie rose 0.8 per cent to $175.63.

Blood products giant CSL fell 1.5 per cent to $286.75 as the Aussie dollar gained against the greenback.

The consumer discretionary sector was the worst performing, dropping 1.7 per cent after the world's largest retailer issued its second profit warning in 10 weeks.

Walmart Inc said high inflation was forcing shoppers to spend more on food, leaving them less likely to splurge on clothing and electronics.

Kmart and Bunnings owner Wesfarmers fell 2.1 per cent to $45.95, online furniture retailer Temple & Webster dropped 4.1 per cent to $3.52, and Breville fell 4.5 per cent to $18.97.

But Myer Holdings soared 21.3 per cent to a nearly three-month high of 48.5c. The struggling retailer said its second-half sales were up roughly 17 per cent compared to the same period in 2021.

Myer said it expected to finish the fiscal year with a positive net cash position of more than $155 million, up from $112 million a year ago, as chief executive John King executes a turnaround plan.

Zip Co soared 19.9 per cent to $1.025, its shares having more than doubled in the two weeks since cancelled its merger with Sezzle.

The Australian dollar hit a month-and-a-half high against the weakening greenback. The Aussie was buying 69.69 US cents, from 69.18 cents at Monday's close.


* The benchmark S&P/ASX200 index on Tuesday closed up 17.4 points, or 0.26 per cent, at 6,807.3.

* The All Ordinaries climbed 18.8 points, or 0.27 per cent, to 7,025.2.


One Australian dollar buys:

* 69.69 US cents, from 69.18 US cents at Monday's close

* 95.24 Japanese yen, from 94.35 yen

* 68.16 Euro cents, from 67.86 cents

* 57.82 British pence, from 57.74 pence

* 111.31 NZ cents, from 110.86 cents.

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