ASX moves higher as mining rally offsets slump for banks, retailers

The Australian sharemarket edged higher on Tuesday as a rally in mining shares helped to offset broader losses, after local investors shrugged off a Wall Street rebound and signs of possible easing in trade tensions between the US and China.

The S&P/ASX 200 closed 16.6 points, or 0.2 per cent, higher at 8899.40, as a rally in gold, silver, rare earths and uranium stocks blunted losses by the big four banks and retailers.

The mixed trading performance came despite a rally on Wall Street overnight, as US President Donald Trump said things with China “will all be fine” just days after he sent market reeling by threatening to step up his trade war. The Aussie dollar was trading at US64.77¢ shortly after 4pm AEDT.

Retailers struggled across the board after the latest ANZ-Roy Morgan survey showed consumer confidence dropped for a second straight week after the Reserve Bank left rates unchanged this month. It’s now at its lowest level in more than a year, with only 10 per cent of Australians expecting good times for the economy over the next five years.

Kmart and Bunnings owner Wesfarmers (down 1.2 per cent) and electronics chain JB Hi-Fi (down 1.5 per cent) paced losses in the consumer discretionary sector, while supermarket giants Woolworths and Coles both lost 1.6 per cent.

In contrast, mining heavyweights closed in the green, with iron ore giants BHP and Rio Tinto up 2.2 per cent and 1.8 per cent, respectively. Rio, the world’s second-biggest miner, said its third-quarter copper output jumped 10 per cent from the year before as it seeks to keep ramping up production of the metal that’s key to the energy transition.

Gold miners jumped again as spot prices for bullion rose a further 2.3 per cent overnight to comfortably trade above $US4100 ($6336) an ounce. Northern Star Resources gained 2.8 per cent, Evolution Mining rose 1.9 per cent and Newmont jumped 4.5 per cent.

Meanwhile, South 32 - which owns Cannington, Australia’s largest silver mine - climbed 3.6 per cent after prices for the metal touched an all-time high above $US52.50 an ounce, as a historic supply crunch in London added momentum to a rally fuelled by surging demand for safe-haven assets. Silver Mines, which owns Australia’s largest undeveloped silver deposit, jumped 7.1 per cent.

Rare earths stocks were on a tear for the second day after this masthead reported that the Albanese government was considering minimum prices for critical minerals and pumping money into new rare earth projects as part of a potential resources deal with the US. The Pentagon is looking to buy as much as $US1 billion of critical minerals to stockpile, the Financial Times said.

Lynas shares rallied 5 per cent, Iluka jumped 15.8 per cent and Arafura Rare Earths soared 25.4 per cent, having gained as much as 27 per cent on Monday.

Uranium miners pushed the energy sector higher, with Paladin Energy gaining 9.6 per cent after it said the production ramp-up at its Langer Heinrich Mine continued to plan, with uranium mined in the September quarter up 63 per cent from the June quarter. Fellow uranium miners Deep Yellow rallied 13.5 per cent and Boss Energy jumped 4.2 per cent.

Maggie Beer Holdings rose 5 per cent after Bickfords owner Angelo Kotses lifted his stake from 5.6 per cent to 19.99 per cent, which company chair Mark Lindh embraced as a “very exciting development”. A representative of Kotses will likely be installed on the board as a result.

On Wall Street overnight, the S&P 500 jumped 1.6 per cent to recover more than half its drop from Friday, having its best day since May. The Dow Jones Industrial Average went up 1.3 per cent, and the Nasdaq composite finished 2.2 per cent higher.

“Don’t worry about China,” Trump said on his social media platform on Sunday. He also said that China’s leader, Xi Jinping, just “had a bad moment” and “doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”

It was a sharp turnaround from the anger Trump displayed on Friday, when he accused China of “a moral disgrace in dealing with other Nations” after its restrictions on rare earths exports, and threatened to place an additional 100 per cent tax on imports from China starting on November 1.

Trump and Vice President JD Vance signalled openness to future trade negotiations in weekend remarks, and Treasury Secretary Scott Bessent said on Monday he still expects Trump to meet Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea later this month.

The backtrack in anger, which came before trading began on Wall Street, raised hopes that the world’s two largest economies could find a working relationship that allows global trade to continue.

“While markets had to react to the US tariff news on Friday, I suspect many will attempt to treat this as TACO in the making, with the aim by the Trump administration to unlock more rare earth exports from China in upcoming talks,” said Jordan Rochester, head of macro strategy for EMEA at Mizuho Bank, citing a trade known as Trump Always Chickens Out.

With AP, AAP and Bloomberg

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.