ASX up again, hits fresh five-month high

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The local stock market hit a new five-month high after gaining ground for a second straight morning.

As of midday AEDT on Wednesday, the benchmark S&P/ASX200 index was up 59.8 points, or 0.83%, at 7241.1, its best level since June 3.

The wider All Ordinaries rose 54.5 points to 7430.9, up 0.74%.

The gains came even as Reserve Bank Governor Phil Lowe in a speech on Tuesday evening outlined all the risks to Australia’s economy, including “stagflation”, a price-wage spiral, a reversal of globalization and climate change.

“The RBA has let investors know what could go wrong, so the central bank cannot be accused of being overly optimistic and misrepresenting the risks,” said CommSec Chief Economist Craig James, in a note in which he wondered if investors were getting too positive.

“Investors indeed place a lot of faith in central banks to get it right, especially in the US and Australia,” he wrote.

At noon, all sectors were up except technology, which was down 0.7%.

Energy was again the biggest gainer, rising 1.9% as Brent crude held steady at US$88 a barrel.

Woodside rose 1.8% to $39.13, Santos gained 1.6% to $7.59 and Beach Energy gained 2.6% to $1.755.

Coal miners continued to rebound after hitting all-time highs in October and then selling off. Whitehaven rose 5.5% to a two-week high of $9.61, while Yancoal added 3.5% to a three-week high of $5.40.

In the heavy mining sector, BHP rose 1.0% to $43.93, Rio Tinto added 0.4% to $105.34 and Fortescue Metals was flat at $19.20.

Goldminers Evolution, Northern Star and Newcrest all gained just under 2%.

Qantas rose 4.8% to $6.15 and traded as high as $6.23, its best level since February 2020, after the national carrier raised its first-half forecast by $150 million , citing still-strong travel demand.

Wesfarmers rose 2% to a two-month high of $49.14. JB Hi-Fi had added 2.5% and Harvey Norman was up 2.2%.

All major retail banks were up, with NAB climbing one percent and the others gaining about half.

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