Two of Australia's largest stocks have hit a record high, as renewed hopes that the Reserve Bank could hold interest rates helped the local sharemarket rebound on Wednesday. The benchmark ASX 200 rallied 61.30 points, or 0.70 per cent, to 8785.70, while the broader All Ordinaries added 51.20 points, or 0.57 per cent, to 9017.20.
The Australian dollar slid 0.21 per cent against the greenback to buy 71.58 US cents. Six of the 11 sectors traded higher, led by energy, material and consumer staple stocks.
Mining giants hit record highs
Helping to lift the market was higher copper prices, with both BHP and Rio Tinto hitting a record high. BHP shares jumped 2.43 per cent to $64.91, while Rio Tinto added 1.62 per cent to $194.47 and Fortescue dropped 1.84 per cent to $21.92.
It was a mixed day of trading as six of the 11 sectors rose. Driving the energy index higher were the uranium producers as Paladin leapt 11.48 per cent to $11.85, while Deep Yellow jumped 7.95 per cent to $1.63 and Bannerman Energy climbed 8.05 per cent to $3.76.
Retail and banks gain
Retail giant Woolworths also climbed 1.98 per cent to $35.09, while rival Coles added 1.07 per cent to $21.78 and Endeavour Group closed 1.06 per cent higher to $2.87.
It was also a strong day for the big four banks. Commonwealth Bank traded 1.08 per cent higher to $164.76, Westpac added 0.73 per cent to $35.85, National Australia Bank closed 0.59 per cent higher to $37.24 while ANZ outperformed as it jumped 1.94 per cent to $34.66.
Economic data sparks rally
Wednesday's rally was sparked by Australian economic data, which showed the economy was growing more slowly than expected, lowering the chances of further interest rate pain from the Reserve Bank of Australia. According to the Australian Bureau of Statistics, gross domestic product rose by just 0.3 per cent in the March quarter to 2.5 per cent compared to a year ago.
VanEck head of investments and capital markets Russel Chesler said the slowing economy lifted the possibility of stagflation and would likely hold the RBA. "Even though inflation is high and likely to remain stubborn, we do not expect the increase in trimmed mean inflation to 3.4 per cent, combined with the added pressure from yesterday's wage decision, to be enough for the RBA to move again in June," he said. "The RBA will be carefully monitoring the overall health of the economy, including employment, before making another move."
The RBA has lifted interest rates in each of their previous three meetings by a total of 75 basis points to take the cash rate to 4.35 per cent.
Other movers
Energy retailer Ampol rallied 3.43 per cent to $34.96 following the announcement from the ACCC that it approved the acquisition of EG Group Australia. Shares in the Lottery Corporation dropped 1.53 per cent to $5.16 even though it told shareholders it had lowered costs due to strict cost disciplines and a reduction in permanent staff. Paladin Energy was the biggest winner on the market, while Lovisa Holdings was the biggest laggard as it dropped 6.94 per cent to $20.91.
