Australia: Shares end higher on commodity boost; financials fall on RBA view
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AUSTRALIAN shares closed higher on Friday (Nov 4), as a rebound in commodity stocks overshadowed gloom over the US Federal Reserve’s hawkish commentary, while financials fell after the country’s central bank downgraded economic growth outlook.
The S&P/ASX 200 index rose 0.5 per cent to finish at 6,892.5 points, after skidding 0.4 per cent earlier. The benchmark posted a second straight weekly gain, rising 1.6 per cent.
Global market sentiment has been bearish after the Fed on Wednesday hiked rates by 75 basis points and shifted the outlook on tightening from short and sharp to long and high, putting to rest any thought of a near-term pause.
The Reserve Bank of Australia (RBA) downgraded the outlook for economic growth, warning that more interest rate hikes will be necessary to bring down sky-high inflation even as it strives to avoid an outright recession.
“In this week, the market is forced to face the undesired reality that the journey ahead will be baked with ‘slower but higher’ interest rates rising in addition to a deteriorating economy. RBA’s warning today just perfectly cemented this view,” IG Markets market analyst Hebe Chen said.
The RBA stuck to a smaller hike of 25 basis points this week, taking rates to 2.85 per cent.
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Australian financials shed about 0.2 per cent, with only one of the “Big Four” banks ekking gains.
Energy stocks rose 3.4 per cent to lead gains on the local bourse, benefiting from rising oil prices, with index majors Woodside Energy and Santos jumping about 4.1 per cent and 2.1 per cent, respectively.
ASX-listed shares of Block jumped 10.9 per cent, after the payments company reported a stronger-than-expected third quarter profit.
Casino operator Star Entertainment Group closed 1 per cent up after trading flat earlier, as three of its units received show cause notices from a Queensland regulator for matters related to a review of its casinos in the state.
The New Zealand benchmark S&P/NZX 50 index rose 0.42 per cent to end at 11,230.8. REUTERS
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