Aust shares firm despite Omicron surge

Australian shares have firmed up in noon trading with solid gains in financial and mining heavyweights as investors largely ignored a surge in local cases of Omicron coronavirus variant.

The benchmark S&P/ASX200 index was up 67.8 points, or 0.91 per cent, to 7488.1 points at 1200 AEDT on Wednesday.

The All Ordinaries index rose 72.7 points, or 0.94 per cent, to 7817.4 points.

Australian investors took the cue from overseas markets as European stocks rose on Tuesday while Wall Street also saw another record-setting session with the Dow Jones Industrial Average lifting 0.26 per cent as investors discounted concerns over Omicron-driven disruptions and closures.

Markets globally are seeing the seasonal Santa rally, when traditional heavyweights see gains amid thin trading volumes in the lead up to the year-end.

Investors have also returned to risk assets amid subsiding concerns about the economic impact of Omicron, with oil and commodities also clawing back losses.

That allowed investors to shrug off a surge in local cases. NSW saw a record 11,201 new infections, while Victoria also hit an all-time high of 3,767 cases.

There were broad-based gains in the local market, with banks, energy and mining sectors – which have the highest weightage -leading the charge.

Each of the Big Four banks were up between 1 and 1.7 per cent with traders betting on improving margins as the economy rebounds better than expected, despite the Omicron blip.

Among the miners, Fortescue Metals Group was up 1.1 per cent to $19.45, while BHP and Rio Tinto were also in the green. Gold explorers lost some ground but battery mineral stocks were again having a good day, with lithium producer Pilbara Minerals powering 5 per cent higher to $3.10.

Energy stocks also benefited as crude oil prices settled near $US80 a barrel because of supply outages and expectations of a fall in US inventories. Oil and gas explorer Santos added 1.8 per cent, while Woodside Petroleum rose as much as 2.8 per cent.

Consumer stocks were in the limelight amid the focus on household spending. Supermarket giants Coles and Woolworths were each up more than 1.5 per cent, Metcash rose 1.2 per cent, while dairy producer Bega and A2Milk climbed more than 3.4 per cent and 1.4 per cent respectively.

Among the rare stocks bucking the trend, Afterpay was down 2.2 per cent at 84.87.

Meanwhile, the Australian dollar was steady, buying 72.34 US cents at 1200 AEDT, compared to 72.28 US cents at Friday’s close.