Australia: Shares end at 7-week high ahead of RBA meeting

AUSTRALIAN shares closed at a 7-week high on Monday (Aug 1), with energy and mining stocks leading gains ahead of a much-expected rate hike from the central bank this week.

The S&P/ASX 200 index closed 0.7 per cent higher to record their fifth straight session of gains. The benchmark ended 0.8 per cent higher on Friday.

The Reserve Bank of Australia (RBA) is expected to deliver a third consecutive half-point interest rate hike in its meeting on Tuesday in a bid to temper soaring inflation, according to a Reuters poll.

“There may be not much of a reaction tomorrow after the cash rate decision,” said Henry Jennings, director of equity sales at Marcustoday Financial Newsletter.

“It should not be a massive factor unless the commentary changes track.”

Energy stocks jumped about 2 per cent to hit their highest level in about a month, even as oil prices fell in Asian trade due to Covid-19 restrictions in China, the world’s largest crude oil importer.

Index majors such as Woodside Energy and Santos were up 2.8 per cent and 1.1 per cent, respectively.

Miners edged 0.8 per cent higher, as hopes for an increased infrastructure spending and prospects of a bailout to help the troubled property sector in China soothed investor sentiment. Rio Tinto and BHP Group jumped 0.6 per cent and 1 per cent, respectively.

Lithium miners Lake Resources and Allkem jumped 3.1 per cent and 4.7 per cent.

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Australia: Shares rise on Monday on resources, tech boost

Heavyweight financials flitted in a narrow range through the session before closing 0.2 per cent higher, even as 3 of the “Big Four” banks settled lower between 0.2 per cent and 1 per cent.

The domestic technology index shed early gains to be the only major laggard in the benchmark, with Xero and ASX-listed shares of Block falling about 0.2 per cent and 1.1 per cent, respectively.

In corporate news, United Malt plunged nearly 17.5 per cent after the commercial maltster cut annual core income forecast due to increased production costs and supply chain constraints in its North American processing segment.

New Zealand’s benchmark S&P/NZX 50 index gained 0.3 per cent to finish the session at 11,525.9 points. REUTERS