Australian stocks stage recovery after dire start to the week

Australian mining and energy stocks rallied on Tuesday after a poor start to the week in wake of Monday’s commodities sell-off.

The ASX ended up recording its most impressive first quarter in decades as low interest rates and high dividends drew investors to equities.

Early in the session, the ASX 200 jumped 1.3% as investor sentiment rebounded, increasing the odds of a rate cut in the near future.

As of 16:17 AEST, mining and natural resources companies were among the Australian stock exchange’s major risers. Mining majors were back on track with Rio Tinto (up 2.4%), BHP Billiton (up 3.09%), Fortescue (up 1.8%) and Newcrest (up 0.6%).

Small caps and penny stocks also breathed a sigh of relief. Acacia Coal, Cockatoo Coal, and GB Energy were up 50%, Sunbird Energy was up 40% and Haranga Resources also rose 40%.

However, not all small caps in the sector bounced back. The biggest falling stock in the energy sector was Coalbank, which fell 25%. King Solomon Mines also fell 25% while Resource and Energy Group also declined 25%.

Overall, market conditions remain challenging as the commodities sector squares up to a stronger dollar and weaker Chinese demand for materials, especially iron ore, of which Australia is a major exporter.