Australia: Shares end higher on commodity boost, RBA decision in focus
AUSTRALIAN shares closed higher on Monday (Sep 5) as the resource-heavy bourse was buoyed by stronger oil and metal prices, while investors also awaited the central bank’s rate decision amid growing inflationary pressures.
The S&P/ASX 200 index closed 0.3 per cent higher at 6,852.2. The benchmark fell 0.3 per cent on Friday.
“I think the market sort of (was) just having a little bit of a relief bit of a relief rally today,” said Brad Smoling, managing director at Smoling Stockbroking.
Smoling anticipates the rally in the resources sector to continue in the near term, based on strong commodity prices and the ability of companies like BHP Group and Rio Tinto to maintain healthy margins and pay dividends.
“Property sector in Australia, which was grossly overvalued, is now turning very rapidly - putting pressure on banks and listed property trusts. So, mining companies are where investors are looking to get a good return,” he added.
Miners jumped 2.1 per cent and were the top gainers on the domestic bourse after iron ore futures rebounded. The sub-index posted its best day in nearly a month.
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Heavyweights BHP Group and Rio Tinto gained 3.2 per cent and 1.8 per cent, respectively.
Oil prices jumped over US$1 a barrel as investors eyed possible moves by Opec+ producers to cut output and support prices at a meeting later in the day.
That led domestic energy stocks 4 per cent higher.
Coal miners Whitehaven Coal and New Hope Corporation firmed 6.5 per cent and 5.7 per cent respectively, while sector major Woodside Energy climbed 4.3 per cent.
Heavyweight banking stocks were the biggest drag to the benchmark, falling 0.4 per cent. The so-called “Big Four” banks fell between 0.2 per cent and 0.7 per cent.
Meanwhile, a Reuters poll found that the Reserve Bank of Australia (RBA) will raise the cash rate by another half-point on Tuesday to curb soaring inflation but will moderate the pace of hikes for the remainder of the year.
The RBA has raised rates by a total of 175 basis points since May to 1.85 per cent.
New Zealand’s benchmark S&P/NZX 50 index closed 0.1 per cent lower at 11,619.04. REUTERS
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