Australian shares hit 2-1/2-month high as lower oil prices fuel broad rally

By Kumar Tanishk

Nov 10 (Reuters) - Australian shares rose to a two-and-a-half-month high on Tuesday as lower oil prices boosted risk appetite, with miners and gold stocks leading broad-based gains.

The S&P/ASX 200 .AXJO jumped 1.1% to 9,129, its highest since August 26. However, the benchmark's relative strength index hovered near 70, indicating it was approaching overbought territory.

Oil prices slipped after US President Donald Trump downplayed the need for military action against Iran, easing inflation concerns that have weighed on markets this year.

Australia has also been insulated from AI-led volatility that has jolted most markets globally, given its limited exposure to the technology.

"There's less volatility on the up and downside of tech," said Colin Dransfield, associate director at Aegis Lane Investments, trading as Sigma Signals.

Dransfield said he sees "some green shoots emerging" and expects capital to flow back into Australia even if enthusiasm for AI continues elsewhere, with resource stocks likely to be the main beneficiaries.

Miners .AXMM rose 1.5% to a near one-month high on firmer copper prices, with BHP BHP.AX up 1.1% and Rio Tinto RIO.AX gaining 0.4%. MET/L

Gold stocks .AXGD gained 2.3% to hit their highest level in a month and a half.

Financials .AXFJ gained 1.1% in their best session in nearly two weeks, recovering from a 1% decline on Monday. Top lender Commonwealth Bank of Australia CBA.AX rose 1.8% ahead of its first-quarter results on Wednesday.

Australia's 10-year bond yield edged 2.3 basis points lower to 4.99%, supporting rate-sensitive property stocks .AXRE, which jumped 2.2%.

Among individual stocks, Qantas Airways QAN.AX rose 6.3% to a 12-week high after saying it would cut 850 Australian jobs. Rival Virgin Australia VGN.AX added 1.8%.

Separately, Canberra said it would require AI firms to report breaches, adding to the regulatory scrutiny that has rattled AI-linked stocks globally. Local tech stocks .AXIJ were up 0.3%.

Investors now await US consumer price data due later in the day for clues on the Federal Reserve's policy trajectory.

In New Zealand, the S&P/NZX 50 .NZ50 leapt 1.4% to a record 14,167.41.