ASX opens 2 per cent higher after materials surge

The Australian sharemarket has surged by over 2 per cent at the start of Monday’s session with materials stocks leading the way.

The ASX 200 was up by 138 points or 2.1 per cent to 6,814.8 points at 10.20 am AEDT after a strong lead from Wall Street. US stocks roared higher on Friday as investors were hopeful that interest rate rises would soon slow.

Gold mining company Northern Star Resources jumped by 5.6 per cent to $8.40 just before 10.15 am AEDT, followed closely by gold and gold copper mining company Newcrest Mining which climbed by 5.1 per cent to $17.70.

At the other end of the spectrum, Oz Minerals lagged by 1.2 per cent, selling at $25.10, and Meridian Energy was down by 0.2 per cent to $4.20.

The Albanese government’s first budget and third quarter inflation figures will dominate the economic agenda this week.

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The budget will be handed down on Tuesday and despite rising cost of living pressures, is not expected to contain immediate spending stimuli that might fuel inflation.

KPMG economist Sarah Hunter expects spending commitments to be staged over time so as not to provide stimulus right away.

“Also, spending increases will ideally be matched with savings elsewhere – so any plans to increase wages for aged care workers or increase defence expenditure, for example, would see reduced spending in other areas,” Dr Hunter said.