Midday Market Update: ASX 200 Surges, BHP Approaches Record Peaks

Midday Market Update: S&P/ASX 200 Makes a Notable Recovery

The S&P/ASX 200 index is up 79 points, or 0.91%, at midday, marking a notable rebound following several weeks of consistent declines. Over the past two days, both the Financials and Materials sectors have shown significant gains, rising approximately 2.7% and 5.5% respectively. As long as these sectors remain robust, the index is likely to continue its upward trajectory.

Market Overview

Today’s Key Narrative: Miners on the Rise

During the previous trading session, a typical pattern emerged with falling oil prices coinciding with surging commodity prices. Gold prices climbed 2.98%, rebounding after a decline of approximately 6.5% over the last 13 sessions. Meanwhile, copper has surged by 3.4%, nearing record highs of US$6.20 per pound, and iron ore futures increased by 1.7% to US$111 per tonne, supported by gains in other metals such as palladium, silver, platinum, and tin.

In contrast, Brent crude oil experienced a 7.5% drop, settling at US$101 a barrel, amid reports of potential peace talks between the US and Iran. Historically, prices have been known to react even before news gets formalised.

BHP, a major player in the mining sector, opened 0.79% higher and finished the session up 3.0%. As of today, it has ascended another 3%, trading within 2% of its all-time high.

Noteworthy Announcements

• Credit Corp Group (CCP): Maintains FY26 NPAT guidance and announces an upgrade in lending volumes.
• Orica (ORI): Reports stronger-than-expected 1H26 NPAT and a bullish outlook for FY26, complemented by a notable dividend increase.
• Tabcorp Holdings (TAH): Is under investigation by AUSTRAC regarding concerns related to anti-money laundering and counter-terrorism financing.
• Zip (ZIP): Reiterates FY26 cash EBITDA guidance, buoyed by strong momentum in the US market.

Capital Raising Movements

• BWP Trust (BWP): Successfully completed its institutional entitlement offer.
• Diablo Resources (DBO): Finalised a pivotal acquisition of a high-grade silver project.
• InteliCare Holdings (ICR): Completed a $2.05 million placement aimed at scaling operations.
• Tali Resources (TR2): Initiated a placement to support exploration efforts in West Arunta.
• Waratah Minerals (WTM): Secured $48 million through placements to finance an aggressive drilling programme at Spur.
• Xenitra (XEN): Raised $1.25 million to fund the next phase of growth.

Commodity Supercycle on the Horizon?

Regal Partners posits that we may be witnessing the beginning of a multi-year commodity supercycle, fuelled primarily by increased demand for US military munitions, infrastructure investments linked to AI, and a notable decade of underfunding in mining operations.

• US Munitions Depletion: Precision-guided munitions inventories are reportedly over half depleted across several critical categories due to recent conflicts, with a rebuilding phase expected to last at least six years.
• Increased Defence Spending: With the US defence budget standing at $1.5 trillion and all G7 countries ramping up their defence expenditures, there is ample support for the defence-related industrial supply chain.
• China’s Rare Earth Dominance: China controls approximately 93% of refined rare earths, reinforcing the merits for non-China rare earth projects, notably Lynas (LYC), Brazilian Rare Earths (BRE), and others.
• Rising Copper Prices: Copper is currently at $6.19 per pound, with projections suggesting that consensus five-year forecasts of $4.80 will require substantial upward adjustments due to increased demand from AI, electrification, and grid development.
• Mining Capital Expenditure Trends: Mining capex peaked in 2012, and the absence of a supply rebound may contribute to persistent inflation trends, making commodities and resource equities—now valued at around 72.37 US cents—an appealing hedge against inflation.

Broker Recommendations

Current updates and moves involving various brokers include companies such as:

• Aurizon Holdings (AZJ)
• Duratec (DUR)
• Flight Centre Travel Group (FLT)
• Infratil (IFT)
• Imdex (IMD)
• ResMed Inc. (RMD)
• Super Retail Group (SUL)
• The Lottery Corporation (TLC)

In summary, the market shows promising signs of recovery, particularly in the mining and commodities sectors, while strategic movements in capital raising and announcements could set the tone for upcoming trading sessions.