Australian shares have recovered to their highest levels since US Liberation Day tariffs sparked a sell-off that wiped trillions of dollars from global markets.
As hints of US-China tariff negotiations buoyed investor sentiment, the S&P/ASX200 rose 103.8 points, or 1.33 per cent, to 7920.5, while the broader All Ordinaries gained 111.5 points, or 1.39 per cent, to 8125.2.
The All Ordinaries had tanked more than nine per cent in three sessions after US President Donald Trump levelled tariffs on almost every country on April 2, with almost $270 billion in value wiped from the top 500 stocks.
The move erased more than $US5 trillion ($A7.8 trillion) from global stock markets in less than a week and prompted economists to slash global growth forecasts.
Three weeks and several tariff escalations later, White House officials have called 145 per cent trade duties on China “unsustainable” and flagged a path to negotiations.
But investors needed to be wary, both of profit taking after the relief rally, and ahead of actual substance on tariff deals, IG Markets analyst Tony Sycamore said.
“US Treasury Secretary Scott Bessent later clarified his statement saying formal talks had not yet started and negotiations are likely to be challenging,” he told AAP.
“I don’t think China is going to go into talks with peace offerings when they feel they’ve been wronged.”
The glimmer of hope helped indexes in Asia rally on Wednesday, with Hong Kong’s Hang Seng surging 2.4 per cent, Japan’s Nikkei up 1.9 per cent and South Korea’s KOSPI composite gaining 1.6 per cent.
All 11 local sectors were in the green, led by a 4.5 per cent rally in energy stocks as oil prices surged on fresh US sanctions on Iran and improved demand hopes for top crude importer China.
Brent crude futures were trading at $US67.65, up more than two per cent to their highest level since April 4.
Australian stocks that outperformed on Tuesday posted modest gains on Wednesday, with financials lifting 0.8 per cent and materials rising only 0.02 per cent.
Iron ore giants rallied on hopes of easing trade tensions and improved demand expectations for China, pushing BHP (3.3 per cent), Fortescue (2.7 per cent) and Rio Tinto (2.0 per cent) higher.
On the flip-side, gold miners weighed on the sector as risk-on sentiment returned and investors took profit on the safe haven, which shed 5 per cent after hitting $US3500 an ounce for the first time.
The big four banks were a mixed bag, with CBA falling 2.5 per cent after rallying to more than $168 on Tuesday, a new high for the world’s most expensive bank stock.
NAB jumped more than three per cent, as ANZ and Westpac both gained more than 1.7 per cent each.
Local IT stocks rallied 3.9 per cent, tracking with a 2.7 per cent lift in the tech-heavy Nasdaq overnight.
Tesla shares rallied 4.6 per cent overnight despite plunging revenues, after boss Elon Musk flagged his controversial role with the Trump administration would be curtailed in May.
The Australian dollar has also recovered its post-Liberation Day dive to trade at 64.18 US cents, down slightly from Tuesday evening when it was buying 64.36 US cents.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Wednesday up 103.8 points, or 1.33 per cent, at 7,920.5.
* The broader All Ordinaries rose 111.5 points, or 1.39 per cent, to 8125.2.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.18 US cents, from 64.36 US cents at Tuesday at 5pm
* 90.93 Japanese yen, from 90.04 Japanese yen
* 56.35 Euro cents, from 55.75 Euro cents
* 48.18 British pence, from 47.97 pence
* 107.08 NZ cents, from 106.79 NZ cents
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