Shares rise as gold miners rally; News Corp drops 6pc

The Australian sharemarket extended gains on Thursday following a sharp climb in the major banks and after a record in the gold price paced a rally in mining stocks.

The S&P/ASX 200 Index rallied 1.3 per cent, or by 111.4 points, to 8957.1 at noon, with ten out of the 11 sectors in the green. It also tracked an advance on Wall Street, when healthcare stocks paced the S&P 500 to a record high that led it to close above 6700 points for the first time.

The materials sector was the best performing, up 2.3 per cent. It comes after gold reached a new all-time high as the US began a government shutdown on Wednesday (Thursday AEST). Bullion rose to touch $US3895.38 an ounce, rallying for a fifth day.

Gold producers were among the best performers on the ASX 200, with Westgold Resources up 5.4 per cent, Evolution Mining adding 3.4 per cent, Northern Star Resources climbing 4 per cent and Bellevue Gold rising 3.6 per cent.

Index heavyweight BHP jumped 1.9 per cent.

Elsewhere in the sector, shares in micro-cap Tambourah Metals are up 48 per cent after Tribeca Investment Partners took a substantial position in the gold and critical minerals explorer.

All the major banks were in the green, with Commonwealth Bank up 1.8 per cent to $170.02, Westpac adding 1.2 per cent, National Australia Bank 1.3 per cent and ANZ 1.8 per cent.

Locally, investors will be focused on the Reserve Bank of Australia’s release of its latest Financial Stability Review at 11.30am.

The August household spending figure released by the Australian Bureau of Statistics came in lower than expected with a rise of 0.1 per cent. NAB economists had pencilled in an increase of 0.3 per cent.

The US federal government shutdown has put a temporary halt on all official data prints, including Friday’s anticipated September nonfarm payrolls report. However, US data from the private sector and the Federal Reserve will continue to be published.

Stocks in focus

In corporate moves, ARN Media shares dropped 2.8 per cent after it said chief executive Ciaran Davis will step down from his position and has appointed chief operating officer Michael Stephenson as his replacement.

REA Group has bought a controlling stake in a Canadian company that does internal property imaging, in response to the arrival of Domain’s new US owner, CoStar Group, in Australia. The Murdoch family-controlled REA, which owns realestate.com.au, bought a 61.5 per cent stake in Planitar Inc, an Ontario-based company that built a camera platform called iGUIDE.

Shares were unchanged. Meanwhile, News Corp dropped 5.5 per cent.

Building products group James Hardie shares rallied 1.3 per cent after it defended its incentive packages for executives ahead of its annual meeting on October 30, as it outlined that the controversial $14 billion acquisition of Azek has a “short-term downward impact” on return on capital employed.