After a strong day of trade yesterday, the ASX is again set to open higher this morning as it edges towards new all-time highs.
The SPI 200 futures are trading 0.37%, or 28 points, higher at 9am (AEDT) following modest gains in overseas markets overnight as many push towards new record highs.
On Wall Street, the S&P 500 was up 0.1% to end the session just 0.3% below its record closing high of 4,796.56, while the Dow ended the session 0.3% higher, and the Nasdaq gained 0.2%.
European markets were also higher after a two-day holiday. The pan-European Stoxx 600 index closed up 0.27% to be within reach of its own record high set in November 2021.
Iron ore surges
The price of iron ore — Australia’s biggest export — has surged to 18-month highs with January iron ore futures contracts in Singapore trading above US$140 ($205) per tonne on Wednesday. This propelled BHP (ASX:BHP) shares to a record high of $50.60 during the session, while Fortescue (ASX:FMG) hit new highs of $28.73.
The steel-making commodity rallied to its highest price since June 2022 thanks to efforts by Beijing to stem China’s property market’s decline. In November, Beijing announced a 1 trillion yuan ($210 billion) plan to support urban revitalisation, providing support to the steel-intensive property sector.
The strength in iron ore has supported a rise in the Australian dollar to its highest level since July. The Aussie is now trading at around 68.48 US cents. The AUD typically follows commodity price moves, particularly that of iron ore — every US$10 per tonne increase in the iron ore price translating to $5.3 billion in nominal GDP terms.
On the small cap front
The S&P ASX Small Ordinaries gained 1.20% yesterday, while the ASX 200 ended 0.79% higher.
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