Australian shares closed at a record high on Thursday (Feb 29) as a rebound in local retail sales boosted sentiment, with investor focus now shifting to the US inflation data for possible clues on the Federal Reserve’s rate cut trajectory.

The S&P/ASX 200 closed 0.5 per cent higher at 7,698.7 points. The benchmark also logged its fourth straight monthly gain, rising 0.2 per cent.

Australian retail sales rebounded in January after a slump the previous month, even as annual growth in spending was subdued amid high interest rates and costs of living.

Attention now shifts to the US January personal consumption expenditures price index – the Fed’s favoured measure of inflation – due later tonight. Markets price about a 20 per cent chance of rate easing in May, and have pushed out the likely timing of a cut to June.

In Sydney, real estate stocks rose 1.7 per cent, with Charter Hall Group and Goodman Group jumping 2.4 per cent and 3.8 per cent, respectively. The index logged its fourth straight monthly gain.

“Despite US Fed rate cuts being pushed back, local pundits continue to expect Reserve Bank of Australia to fast track rate cuts and that is helping real estate stocks,” Mathan Somasundaram, CEO at Deep Data Analytics said.

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Miners edged 0.2 per cent higher on the day but posted their second consecutive month of losses, while the energy sector rose 0.3 per cent but snapped two straight months of gains.

Gold stocks climbed 1.5 per cent but posted second straight monthly loss. Banks rose 0.2 per cent and logged gains for the fourth consecutive month.

Among individual stocks, Star Entertainment jumped 8.3 per cent as its half-year profits beat consensus estimates.

Diversified miner South32 jumped 4.6 per cent, after the company announced the divestment of its flagship Illawarra metallurgical coal project in New South Wales for US$1.65 billion.

Across the Tasman Sea, the New Zealand benchmark S&P/NZX 50 index fell 0.2 per cent to 11,741.47 on the day, snapping three straight months of gains. REUTERS