The Australian sharemarket finished higher on Thursday but pared earlier gains after stronger-than-expected employment data lifted expectations that the Reserve Bank of Australia could raise interest rates as soon as next month.
The S&P/ASX 200 index closed up 65.8 points, or 0.75%, at 8,848.7, with nine of the 11 sectors ending the session in positive territory.
Fresh data showed the unemployment rate falling to 4.1% in December from 4.3% in November, while employment rose by 65,200 jobs, more than double market expectations of around 30,000.
The unexpectedly tight labour market increased speculation that the RBA may need to tighten policy sooner than previously anticipated.
Energy stocks led the market higher as Brent crude oil traded near US$65 per barrel.
Woodside Energy gained 2.9%, while Santos surged 5.3% after reporting a 5% increase in fourth-quarter production to 22.3 million barrels of oil equivalent.
The major banks rebounded, with Commonwealth Bank adding 2.3%, National Australia Bank up 3%, Westpac adding 2.1% and ANZ closing 0.6% higher.
Materials stocks underperformed, however, weighing on broader gains. Fortescue slid 5.1% after reporting a marginally weaker-than-expected December quarter, including further misses on hematite costs and net debt.
BHP fell 0.8%, while Rio Tinto edged 0.6% higher.
Gold stocks were also weaker, with Northern Star plunging 8.4% after cutting its full-year guidance to between 1.6 million and 1.7 million ounces of gold sold, down from as much as 1.85 million ounces previously forecast.
Elsewhere, DroneShield jumped 9.5% after Bell Potter lifted its price target on the stock by 13% to $5, declaring that 2026 would be “the year of the drone”.
IperionX added 5.4% after securing a US$300,000 ($444,010) prototype order from American Rheinmetall to produce 700 lightweight titanium components for U.S. Army heavy ground combat vehicles.
On the bond markets, yields moved higher, with 10-year and two-year rates rising 1.1% and 2.5% to 4.792% and 4.152%, respectively, reflecting growing expectations of tighter monetary policy.
