Australian shares rose on Thursday, pacing Wall Street higher as expectations of more policy easing in China underpinned anything linked to commodities.

The benchmark S&P/ASX 200 index added 35.6 points, or 0.4 per cent, to 8223 points, 47 points away from the September 30 record close of 8269.8. The All Ordinaries gained 0.5 per cent.

Of the 11 sectors, six finished in the green with miners and energy up the most, tracking higher commodity prices.

Iron ore prices climbed 2.5 per cent in Singapore to $US107.45 a tonne on hopes that top consumer China will soon announce more forceful policies to revive a sputtering economy.

“Miners have been sold off hard after the China stimulus euphoria got a bit too far ahead of itself,” said Sam Berridge, portfolio manager of Perennial’s Natural Resources Trust.

‘Optimism’

“My understanding is that there’s more news expected from the Chinese government on Saturday and maybe there’s a little bit of optimism creeping into the market.”

Earlier this week, iron ore prices slumped after authorities failed to deliver a widely anticipated multitrillion-yuan spending.

On the ASX, Fortescue leapt 4 per cent to $19.73 and Rio Tinto rallied 1.4 per cent to $119.87. BHP jumped 1.4 per cent to $43.90.

Separately, Norway’s sovereign wealth fund removed BHP from its climate watch list, where it had been placed in 2020 due to coal use and production. The fund owns a 1.5 per cent stake.

Meanwhile, Arcadium Lithium was the top gainer on the ASX, soaring nearly 40 per cent to $8.2 after Rio Tinto offered $9.9 billion to take over the miner in an all-cash deal.

The news lifted sentiment for the battered lithium sector where traders have built a record number of short positions due to a weak metal price. Lake Resources soared nearly 12 per cent to 4.7¢, Sayona Mining leapt 6.3 per cent higher to 3.4¢ and Liontown Resources jumped more than 5 per cent to 83.5¢.

“Rio’s bid has probably caused some of those shorts to reconsider their positions,” said Mr Berridge who remains bearish on lithium. “You need a lot more spark on the demand side to soak up the substantial amount of supply that has come to market over the last 18 months,” he added.

Stocks on the move

The energy sector tracked a rebound in oil prices ahead of potential supply disruptions from Hurricane Milton and the war in the Middle East. Woodside advanced 0.7 per cent to $25.74, Beach Energy rose 1.6 per cent to $1.25 and Santos gained 1 per cent to $7.19.

In corporate news, auto parts manufacturer ARB Corporation gained 1.8 per cent to $44.38 after inching closer to completing its acquisition of US business 4 Wheel Parts.

Financial services provider Netwealth jumped nearly 4 per cent to $27.16 after posting a record increase in funds under administration over the September quarter thanks to new money and positive market movements.

And Mexican food chain Guzman y Gomez reversed early losses
and closed up 0.2 per cent to $38.71. That’s after the company reiterating fiscal 2025 guidance despite softer-than-expected sales in the US.