Australia: Shares clock third session of gains on renewed risk appetite

AUSTRALIAN shares edged higher for a third session on Tuesday (Nov 8) as global equities rallied on heightened risk-on sentiment, driven by hopes of an eventual easing of Covid-19 curbs in China and a slowdown in the pace of rate hikes by the US Federal Reserve.

The S&P/ASX 200 index ended 0.4 per cent higher at 6,958.9. The benchmark closed 0.6 per cent firmer on Monday.

Investors globally appeared to shrug off data showing Chinese exports and imports had unexpectedly contracted in October amid zero-Covid policy and the likelihood that US consumer price index on Thursday will show inflation remains high.

“The next few days depend largely on the US inflation reading and the midterm election results,” said Kunal Sawhney, chief executive officer at Kalkine Group.

He explained that the yet-to-subside demand levels and the comfortable position with respect to employment is also impacting the Aussie market at the moment.

Financial stocks led the gains in the benchmark with their 1 per cent climb. The “Big Four” banks advanced between 0.3 and 2 per cent.

Heavyweight mining stocks rose 0.2 per cent while healthcare stocks firmed 1 per cent.

Australia’s No 2 independent gas producer Santos fell 5.3 per cent after it flagged that its gas and oil output is set to fall by around 10 per cent in 2023, a bigger-than-expected decline.

This, and falling oil prices pushed energy stocks 2.3 per cent lower.

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Meanwhile, a measure of Australian consumer sentiment sank in November as rising interest rates and surging inflation clouded the outlook for family finances, though actual spending has yet to follow.

“Unless any dip in consumer sentiment deals a blow to consumption and hence prices, the RBA (Reserve Bank of Australia) cannot be expected to turn either neutral or dovish. This is why positive movement in the Aussie market has remained fragile over the past months,” Sawhney said.

Across the border, New Zealand’s benchmark S&P/NZX 50 index fell 1.2 per cent to end the session at 11,151.89. The benchmark posted its worst session since Oct 10. REUTERS