By Shruti Sonal
3 Min Read
* Miners hit highest since April 2011
* Bull run for resources to continue into 2021 – analyst
* NZ’s Tilt Renewables hits record high on possible buyout (Updates to close)
Dec 7 (Reuters) – Australian shares scaled a fresh nine-month high on Monday as a red-hot rally in iron ore prices showed no signs of easing and lifted heavyweight mining stocks for a fifth straight session.
The S&P/ASX 200 index settled higher 0.6% at 6,675, after having earlier climbed as much as 1.2% to its highest since Feb. 27.
Australian stocks also outperformed broader Asia, which fell after a Reuters report the United States was preparing to impose sanctions on some Chinese officials raised concerns about relationship between the world’s top two economies.
Mining stocks hit their highest since April 2011, adding about 10% in the past five sessions, as iron ore prices rose further driven by supply concerns and robust demand in China.
“Iron ore prices are set to remain high in the short term until more supply hits the market,” said James McGlew, executive director of corporate stockbroking at Argonaut. “For now, it would appear that the bull run for resources will continue into 2021.”
Fortescue Metals Group scaled a fresh peak, while BHP Group and Rio Tinto touched their highest since April 2011 and May 2008, respectively.
Among individual stocks, retailer Metcash Ltd led gains on the benchmark after posting a jump in first-half underlying profit after tax.
Energy stocks gained up to 2.2%, with Santos Ltd adding 3.8% on a 10-year agreement to supply liquefied natural gas from its Barossa project to a unit of Japan’s Mitsubishi Corp.
Financial stocks underperformed the broader rally as regulatory woes continued for banks.
The banking regulator said it had ordered a securitisation review after finding irregularities with how some banks repurchased residential mortgage loans that had repayments deferred.
New Zealand’s benchmark S&P/NZX 50 index rose 0.2% to close at 12,631.38.
Tilt Renewables hit a record high after top shareholder Infratil said it was looking at potentially selling its 65.5% stake, which may result in an offer for all of Tilt. (Reporting by Shruti Sonal in Bengaluru; Editing by Subhranshu Sahu)