ASX 200 Edges Higher as Commodities Lead Gains

• Commodity markets remain a key driver for Australian equities.
• The index advanced but struggled to hold onto intraday highs.
• Demand from China remains crucial for Australia’s export outlook.
• Mining and hard commodity stocks outperformed during Monday’s session.

The ASX 200 saw a modest rally during Monday’s trading session, before giving back some gains and showing signs of hesitation near the AU$8,850 level. Despite this pause, the index remains in a strong long-term uptrend, which continues to guide market sentiment.

Looking ahead, movements in the Australian index will likely track closely with shifts in commodity markets. As a major exporter of iron, aluminium, copper, and gold, Australia’s equity performance often reflects changes in the pricing of these key resources.

BHP Group Limited (BHP)

BHP rose 1.64% during the session, extending the bullish momentum seen over the past month. The stock remains well above the 200-day EMA and even opened with a significant upward gap.

A key driver of this strength is the increased demand for iron ore from Chinese steel mills. If the Chinese economy continues to recover, iron producers like BHP are likely to remain in focus for investors.

Rio Tinto Limited (RIO)

Rio Tinto gained 1.47% during the Monday session, adding to its 30-day advance of 6.14%. Despite the recent momentum, the stock is still down 1.01% over the past 12 months.

The latest earnings call fell short of expectations, but lithium remains a strong market, and RIO could benefit from that trend. Similar to BHP, there is also growing focus on potential increases in Chinese demand for iron ore.

RIO offers an AU$2.27 dividend, with the ex-dividend date set for this Thursday.

James Hardie Industries Plc (JHX)

James Hardie Industries rose 1.91% during Monday’s session, adding to the previous month’s gains. Over the past 30 days, JHX is up 3.41%, though it remains down 12.54% over the past year.

Late last week, Jefferies initiated a “buy” rating on JHX, boosting market confidence. However, with the earnings call scheduled for next Tuesday and the price nearing the 200-day EMA, some traders may show caution.

Earnings are forecast at AU$0.529 per share, with revenue expected to reach AU$1.46 billion. Jefferies noted that James Hardie could be seen as a “cheap way to play the commodities demand coming from China”.

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