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Australia shares mark best day in 2 months on Democrat Senate win

Published 07/01/2021, 05:09 pm
Updated 07/01/2021, 05:12 pm
© Reuters.
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* Energy stocks hit highest in 10 months

* BHP, Rio, Fortescue hit record highs

* Tech stocks track U.S. peers lower (Updates to close)

By Shruti Sonal

Jan 7 (Reuters) - Australian shares rose on Thursday by their most in nearly two months, as hopes grew for more U.S. stimulus after Democrats won control of the Senate with victories in Georgia's two runoff elections.

The S&P/ASX 200 index .AXJO closed 1.6% higher at 6,712 points, after rising about 2% earlier in the session.

"It's all about the Blue Wave and the Democrat cash cow potential for equity markets," said Brad Smoling, managing director at Queensland-based Smoling Stockbroking.

Miners .AXMM were the standout performers, climbing nearly 5% to hit their highest since June 2008, following a jump in iron ore, copper and nickel prices. MET/

Industry heavyweights Rio Tinto (LON:RIO) RIO.AX , BHP Group BHP.AX and Fortescue Metals Group FMG.AX all hit record highs.

Analysts expect the Democrat-controlled U.S. Senate to help President-elect Joe Biden push his policies and further boost commodity prices.

The Democrat sweep may continue to support base metal, material and energy prices, benefitting Australian metal and mining stocks, according to DailyFX strategist Margaret Yang.

Further aiding sentiment, Australian Prime Minister Scott Morrison said the country was on course to begin administering the first COVID-19 vaccines next month. rise in crude prices on the back of output cuts by Saudi Arabia lifted energy stocks .AXEJ , which hit their highest since March last year.

Financials .AXFJ added more than 3%, with the "Big Four" banks seeing sharp gains.

In sharp contrast, tech stocks .AXIJ dived more than 4%, tracking losses in the tech-heavy Nasdaq index .IXIC overnight on worries of stricter regulations under the Democratic administration. Ltd APT.AX tumbled about 7.5%, while Xero Ltd XRO.AX lost 4.8%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 gained 1.1%, with bourse operator NZX Ltd NZX.NZ rising as much as 2% on upbeat December trading figures.

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