Global Markets | Australian stocks recover as banks, miners advance on improved risk sentiment

Australian shares snapped a two-session slide on Wednesday, lifted by banks and miners, as signs of progress towards a U.S.-Iran deal improved risk appetite.

The S&P/ASX 200 index ended 1.3% higher at ‌8,793.60, notching its ⁠highest ⁠closing since early April. The benchmark ended 0.2% lower on Tuesday.

U.S. President Donald Trump flagged "great progress" toward a final deal with Tehran and signalled a brief pause in operations escorting ships through the Strait of Hormuz, which Iran has blockaded since late February.


Financial stocks rose 2.4%, a day after the Reserve Bank of Australia hiked its benchmark rate ⁠for a third ‌time this year to 4.35%. The so-called "Big Four" banks gained between 2.8% and 3.5%.

Prashant Newnaha, senior rates strategist at ⁠TD Securities, said the RBA did not signal further tightening, but markets still expect another increase, likely at the August meeting, to bring inflation sustainably back to target.

Swaps now imply a more than 50% chance of a 25-basis-point rate hike at that meeting. Miners rose 2.6% on Wednesday, supported by firm metal prices and iron ore futures as Chinese steel mills resumed production after the ‌May Day holiday with expectations of a seasonal demand pick-up. Mining majors BHP Group, Rio Tinto and Fortescue gained between 2.3% and 3.2%.

Capping gains, energy stocks ⁠slumped 2.1% as oil prices slipped for a second day on hopes of a potential Iran deal.

Among individual stocks, data centre operator DigiCo Infrastructure jumped 25% after announcing a $750 million sale of its Chicago data centre.

In New Zealand, the benchmark S&P/NZX 50 index closed 0.8% higher at 13,145.19.

Reserve Bank of New Zealand Governor Anna Breman said that the country's financial system remains resilient despite a worsening global risk outlook.