Index Update: Australian equities advanced on Monday as record copper and gold prices underpinned early signs of a Santa Claus rally in the Christmas-shortened trading week. The S&P/ASX 200 climbed 78.50 points, or 0.91%, to close at 8,699.90, setting a new 20-day high. The rally was broad-based, with all 11 sectors finishing in positive territory. Materials led the gains, rising 2.34% on the day and 2.81% over the past five sessions. Over the last five days, the benchmark index has added 0.75% and is trading about 4.56% below its 52-week high.
Macro Update: China left benchmark loan prime rates unchanged for a seventh consecutive month in December, in line with market expectations, according to Reuters. The one-year LPR was held at 3.00% and the five-year rate at 3.50%, reflecting policymakers’ cautious stance as the economy remains on track to meet this year’s growth target. Analysts said the central bank’s “cross-cyclical” policy approach and squeezed bank margins could allow authorities to delay further monetary easing until next year, even as recent data showed slowing factory output, weaker retail sales, and softer household borrowing amid a prolonged property downturn.
Top Market Movers: Among the top gainers on the ASX, Nick Scali Limited (ASX:NCK) surged 9.88% to AUD 23.25, followed by NexGen Energy (ASX:NXG), which climbed 8.62% to AUD 13.99, while DroneShield Limited (ASX:DRO) added 7.91% to close at AUD 3.00. On the downside, WiseTech Global (ASX:WTC) fell 4.20% to AUD 67.23, Lovisa Holdings (ASX:LOV) slipped 2.36% to AUD 29.78, and Charter Hall Group (ASX:CHC) declined 2.13% to AUD 25.32.
Commodity Update: The yen hovered near a record low against the euro on Monday after Bank of Japan Governor Kazuo Ueda maintained a cautious tone despite Friday’s rate hike. Rising geopolitical tensions boosted safe-haven demand, with gold climbing 0.71% to $4,418.65 and silver jumping 2.36% to $69.08. Copper rose 0.72% to USD 11,959.00, while Brent crude edged up 0.073% to USD 60.91 after a U.S. tanker interception.
Our Stance: Australian equities started the Christmas-shortened week on a firm footing, with a broad-based rally lifting the S&P/ASX 200 to a fresh 20-day high. The positive tone contrasted with a cautious macro backdrop, as China kept benchmark lending rates unchanged for a seventh month, signalling policy patience despite softer economic indicators. Commodity markets reflected heightened uncertainty, with safe-haven demand supporting precious metals and copper extending gains. Overall, market momentum appears constructive near year-end, though global policy caution and mixed growth signals persist.
In the latest session, the S&P/ASX 200 Index rose 78.50 points to close at 8,699.90, supported by a modest bullish candlestick and strong volumes, indicating sustained investor confidence. On the daily chart, the index remains below its 50-period SMA, which continues to act as a key dynamic resistance. The immediate focus is on the support zone around 8,550.70; holding above this level is crucial to preserve the near-term positive structure. A successful defence would allow consolidation of recent gains and reinforce confidence in the broader trend. Every week, the index trades comfortably above its 50-period SMA, highlighting a constructive longer-term outlook. Overall, the technical setup points to scope for further upside, provided key support levels hold.







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