Easing oil prices sent the ASX higher on Wednesday,particularly travel and transportation-exposed stocks,as a relief rally swept through Wall Street and into Asian trade.
The benchmark S&P/ASX 200 held onto gains all day before closing 1.1% higher,up 77.8 points to 7175.20 with moderate volumes. This was the highest close since Russian President Vladimir Putin sent troops into Ukraine on 24 February and sparked chaos in commodity and energy markets.
Both US and Brent crude on Wednesday dropped below $US100 per barrel for the first time in two weeks,and Asian markets reversed sharp declines seen on Tuesday.
![Oil prices are set for a weekly fall for the first time this year.](https://static.ffx.io/images/$width_300%2C$height_150/t_crop_auto/t_sharpen%2Cq_auto%2Cf_auto/9a1244b217995c4ced7d20b8abc1c17c48a9e07d)
Oil prices are set for a weekly fall for the first time this year.Getty
Retreating oil prices were joined by weaker than expected US consumer price data on the eve of a Federal Reserve rate hike,according to Oanda senior market analyst Jeffrey Halley.
“In a market hungry for reasons to buy the dip,that was enough to pull back on hawkish (Federal Reserve) expectations from their policy decision tonight,″ he wrote in a note to clients on Wednesday.
“That,of course,is complete nonsense,and I believe the oil retreat is the underlying reason. That too is built on very marginal foundations,on the hopes that Ukraine-Russian negotiations will yield fruit. If nothing else,it shows that the pre-programmed need to buy the dip in equities is alive and well.“
On the ASX,travel stocks also rallied thanks to easing restrictions in New Zealand and news some airlines were lifting mask requirements. Qantas gained 2.2 per cent to a two-week high of $5.05,Corporate Travel gained 5.3 per cent,Webjet gained 3.3 per cent,and Flight Centre improved 1.9 per cent.
Woolworths gained 3 per cent and Coles was up 1.7 per cent,while the big five banks closed higher. BHP dragged,down 0.4 per cent,and QBE Insurance fell 0.9 per cent after reporting 34,000 flood damage claims.
Santos gained 1.2 per cent and Beach Energy gained 0.7 per cent,but Woodside and Worley declined.
Three tiny mineral explorers surged after the Federal Government announced generous production grants. Australian Vanadium jumped 40 per cent,Arafura Resources gained 15.4 per cent,and Alpha HPA gained 15.2 per cent.
The technology sector followed the Nasdaq higher,with Block Inc gaining 7 per cent,Life360 up 7.4 per cent,and WiseTech Global up 4.7 per cent. SEEK gained 4.3 per cent to an eight-week high of $29.96.
The US Federal Reserve was expected to announce on Wednesday,early Thursday morning in Australia,that it would lift its official cash rate by 25 basis points to 0.5 per cent. Anything different would surprise markets.
Biggest gains:
Biggest declines: