Australia: Shares rise on financials boost ahead of central bank decision
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AUSTRALIAN shares rose on Monday, led by financial stocks, ahead of a highly anticipated modest interest rate hike by the central bank this week despite the highest inflation in three decades.
The S&P/ASX 200 index was up 1.2 per cent at 6,864.4 points, as of 0017 GMT. The benchmark closed 0.9 per cent lower on Friday.
Wall Street closed sharply higher on Friday with all major US indexes up 2.5 per cent or more on encouraging economic data ahead of the two-day policy meeting of the Federal Reserve this week.
A Reuters poll found that respondents expect the Reserve Bank of Australia to raise interest rates by a modest 25 basis points for the second meeting in a row on Tuesday.
The central bank tempered the pace of hiking in its last meeting to support economic growth. Financials jumped as much as 1.3 per cent with Australia’s “Big Four” banks up between 0.8 per cent and 1.7 per cent.
The country’s No. 1 lender Commonwealth Bank of Australia climbed the most with a 1.7 per cent jump.
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Tech stocks added most among sub-indexes, with a surge of nearly 4 per cent, their biggest intraday jump since Oct 18.
Among individual stocks, Australia-listed Nitro Software rose 19.7 per cent as the company said it intends to recommend the nearly A$500 million takeover offer by Canada’s Alludo after it rejected a A$1.80 per share bid from Potentia Capital Management.
Coronado Global Resources was the biggest gainer in the benchmark index, rising as much as 9.1 per cent, after it reported annual group revenue more than doubling to $2.85 billion year-to-date.
Bucking the positive mood, mining, energy and gold stocks traded in the red following a slump in commodity prices.
New Zealand’s benchmark S&P/NZX 50 index rose 0.8 per cent to 11,213.05 points.
The Reserve Bank of New Zealand said its annual stress test on the banking sector showed banks were “well-placed” to overcome stagflation. REUTERS
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