The Australian sharemarket rose on Thursday as investors continued to rotate out of the banks into the mining stocks, pushing BHP up to a 52-week-high to take it ever closer to becoming the largest company on the bourse.

The S&P/ASX 200 was up 41.4 points, or 0.5%, to 8861.70 , with seven of the 11 sectors stronger, led by materials and healthcare.

BHP underpinned gains in materials as it jumped 2.6% to $49.37 after it a 52-week high of $49.75, sending its market capitalisation to just below $251 billion. The stock has already rallied about 8% this year as it taps into record prices for key metals, including copper, silver, platinum and gold, driven by geopolitical uncertainty, supply concerns, and the prospect of a weak US dollar.

MLC Asset Management portfolio manager Anthony Golowenko said the move reflects a broader reweighting. “We are definitely seeing a rotation. BHP isn’t as cheap as it was, but we still see robust cash flows and earnings, and a valuation correction in names like CBA,” an MLC portfolio manager said. “BHP and similar businesses are powering emerging Asia’s growth, and that’s looking quite strong.”

Commonwealth Bank reversed an earlier intraday loss to close up 0.4% at $153.50 after a late rally in the banks, giving it a market cap of $256.86 billion – narrowly holding on to the title of the ASX’s largest company. That marks a sharp reversal from June, when BHP was worth less than half as much as the bank. Westpac added 0.6% to $38.49, National Australia Bank 1.1% to $42.36 and ANZ by 2.6% to $37.32.

Rio Tinto climbed 0.4% to $147.20 after the miner agreed to work with BHP to extract up to 200 million tonnes of iron ore at their neighbouring Yandicoogina and Yandi operations in the Pilbara. South32 rose 4.6% to $4.14, putting it among the top performers as copper traded at record levels .

Demand for so-called future-facing commodities was also cited as a key driver for the sector. “There’s a much longer runway for key metals, especially in a geopolitical environment where access to supply matters,” the Golowenko said. “Companies like BHP have high-quality assets and low production costs, which is increasingly relevant as commodity prices stay firm.”

Healthcare also enjoyed gains as CSL firmed 1% to $175.28 and ResMed 2.4% to $38.95. Technology was the main drag as Life360 dropped 5.1% to $28.75 and Xero by 4.1% to $103.16.

Treasury Wine Estates lost 4.9% to $5.10 as Citi downgraded it to “sell” from “neutral”, warning that risks are skewing to the downside after fresh distributor uncertainty and a recent share price rally.

4DMedical rose 5.7% to $4.53 after it secured $150 million in an institutional placement at $3.80 per share, supported by new global long-only investors and strong demand from existing shareholders. The stock, however, remains up 700% from a year ago.

Carma fell 7% to $2 as it delivered 244 retail units in December, lifting quarterly deliveries to 746 – up 18% from the three months to September and 29% higher than the same period a year earlier.