Global Markets | Australian shares extend gains as miners lead recovery; rate hike in focus
Australian shares rose for a second consecutive session on Wednesday, clawing back some losses from a conflict-driven selloff earlier this week, led by miners as investors weighed the chances of an interest rate hike next week.
By Reuters |
Australian shares rose for a second consecutive session on Wednesday, clawing back some losses from a conflict-driven selloff earlier this week, led by miners as investors weighed the chances of an interest rate hike next week.
The benchmark S&P/ASX 200 index ended 0.6% higher at 8,743.50 points, after closing 1.1% higher on Tuesday. The benchmark has lost roughly 5% so far this month, dominated by the U.S.-Israeli war with Iran.
With the Middle East conflict in its second week, volatility in the market hasn't abated, with few large movers in the resource sector keeping the market positive, said Jamie Hannah, deputy head of investments and capital markets at VanEck Australia.
"In the short term, we are just going to continue to see volatility. But it could be prudent for the RBA (Reserve Bank of Australia) to act sooner rather than later," added Hannah.
The central bank will meet next week, when its policy board will decide whether to raise or hold the cash rate at 3.85%.
Swaps are now pricing in nearly a 70% chance of a 25-basis-point hike, up sharply from below 30% last week, underscoring market uncertainty over the Middle East conflict's inflationary impact.
A growing number of economists, including from top lenders Westpac and NAB, are pencilling a rate hike next week following an inflation warning from a senior central bank official.
Australian miners advanced 2.2%. Shares of Fortescue climbed 3.7% in their best session in two weeks, while Rio Tinto and BHP Group added 1.1% and 1.4%, respectively.
The gold sub-index gained 1.5% as bullion prices rose, with a retreat in oil prices easing inflation worries.
Financials climbed 0.9%, while energy stocks eked out modest gains, rising 0.6%.
Among the laggards, healthcare and local technology stocks fell 1.4% and 1.6%, respectively.
In New Zealand, the benchmark S&P/NZX 50 index closed 1.5% higher at 13,293.13 points, its best session since February 18.
The benchmark S&P/ASX 200 index ended 0.6% higher at 8,743.50 points, after closing 1.1% higher on Tuesday. The benchmark has lost roughly 5% so far this month, dominated by the U.S.-Israeli war with Iran.
With the Middle East conflict in its second week, volatility in the market hasn't abated, with few large movers in the resource sector keeping the market positive, said Jamie Hannah, deputy head of investments and capital markets at VanEck Australia.
"In the short term, we are just going to continue to see volatility. But it could be prudent for the RBA (Reserve Bank of Australia) to act sooner rather than later," added Hannah.
The central bank will meet next week, when its policy board will decide whether to raise or hold the cash rate at 3.85%.
Swaps are now pricing in nearly a 70% chance of a 25-basis-point hike, up sharply from below 30% last week, underscoring market uncertainty over the Middle East conflict's inflationary impact.
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A growing number of economists, including from top lenders Westpac and NAB, are pencilling a rate hike next week following an inflation warning from a senior central bank official.
Australian miners advanced 2.2%. Shares of Fortescue climbed 3.7% in their best session in two weeks, while Rio Tinto and BHP Group added 1.1% and 1.4%, respectively.
The gold sub-index gained 1.5% as bullion prices rose, with a retreat in oil prices easing inflation worries.
Financials climbed 0.9%, while energy stocks eked out modest gains, rising 0.6%.
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Among the laggards, healthcare and local technology stocks fell 1.4% and 1.6%, respectively.
In New Zealand, the benchmark S&P/NZX 50 index closed 1.5% higher at 13,293.13 points, its best session since February 18.
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