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Relief rally as ASX climbs 1.3pct

·3-min read

The local share market has enjoyed its best gains in almost a fortnight, following two days of losses and ahead of a big Federal Reserve meeting starting in the US.

The benchmark S&P/ASX200 index on Tuesday closed up 86.5 points to 6806.4, a gain of 1.29 per cent. The broader All Ordinaries rose 81.5 points to 7030.1, in a 1.17 per cent rise.

Tribeca Investment Partners Alpha Plus Fund portfolio manager Jun Bei Liu said the gains probably had more to do with what was occurring on Wall Street than Tuesday's release of Reserve Bank of Australia minutes suggesting the pace of rate hikes could soon ease.

"It's mainly because the markets have been sold off quite a bit, many days consecutively last week, in a negative run," she told AAP.

"There's just so much pessimism that has been priced in over what is to come, ever since we had that really shocking inflation number over in the US (last week)," Ms Liu said.

"So far, because the markets been so bearish, we get a bit of a relief rally ahead of the FOMC," or Federal Reserve Open Market Committee, the group of US central banks that will announce the next round of rate hikes on Thursday morning, Australia time.

Nine of the ASX's 11 sectors closed higher, with property trusts and healthcare the only ones to lose ground.

The mining sector was the biggest gainer, rising 2.7 per cent as BHP climbed 3.6 per cent to $39.18 and Rio Tinto added 2.5 per cent to $94.72.

But Fortescue Minerals dipped 0.9 per cent to $17.30 after announcing plans to invest $US6.2 billion ($A9.2b) to achieve net zero carbon emissions by 2030.

Goldminer Evolution gained 2.4 per cent to $2.10 while Northern Star and Newcrest added 1.2 and 1.4 per cent, respectively.

IGO rose 4.6 per cent to $14.93 on news of promising exploration results at a lithium project in WA's Goldfields region, in which it holds a 25 per cent stake.

All of the big four banks were higher on the prospect of less aggressive rate hikes, with CBA enjoying its best session in nearly two months.

The country's second-biggest company rose 2.0 per cent to $96.53, while Westpac added 1.6 per cent to $21.89, NAB advanced 1.8 per cent to $30.22 and ANZ climbed 1.2 per cent to $23.84.

The energy sector was the second-biggest gainer, as coalminer New Hope soared 8.8 per cent to an all-time high of $5.94 after reporting its full-year profit after tax had risen more than 12-fold thanks to soaring coal prices.

New Hope will pay 86c a share in dividends for 2021/22, up from 11c the prior year, after making $983m in profit.

Whitehaven Coal added 3.9 per cent to $8.63 while oil and gas producer Woodside gained 1.9 per cent to $33.06.

Elsewhere, retailer KMD Brands rose 2.2 per cent to 91.5c after reporting that Kathmandu had its highest-ever sales in the three months to July 31.

IDP Education was up 2.3 per cent to $28.27 after the overseas student placement company announced plans to buy Taiwan-based global rival Intake Education for up to $A83m.

The Australian dollar was buying 67.20 US cents, from 66.88 US cents at Monday's close.

ON THE ASX:

* The benchmark S&P/ASX200 index on Tuesday gained 86.5 points to 6806.4, a rise of 1.29 per cent.

* The broader All Ordinaries added 81.4 points, or 1.17 per cent, to 7030.0.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.20 US cents, from 66.88 US cents at Friday's close

* 96.40 Japanese yen, from 95.88 yen

* 67.05 Euro cents, from 67.06 cents

* 58.71 British pence, from 58.74 pence

* 113.11 NZ cents, from 112.31 cents.