Australia: Shares end higher as investors unfazed by hawkish Fed

AUSTRALIAN shares posted a marginal weekly loss, although they ended higher on Friday (Nov 18) as investors seemed unvexed by US Federal Reserve officials’ hawkish comments while global miner BHP Group’s improved bid for OZ Minerals also lifted sentiment.

The S&P/ASX 200 index ended 0.2 per cent higher at 7.151.8. The benchmark lost about 0.1 per cent this week.

“Overall Australian investors are assessing whether the market has stabilised and this is a good time to start buying,” said Russel Chesler, head of Investments and Capital Markets at VanEck Australia.

The Aussie market was not fazed by the overnight drop in US equities on the back of comments by St Louis Fed President James Bullard saying the central bank needs to keep raising interest rates, Chesler said.

Minneapolis Fed Bank President Neel Kashkari said the US central bank should not stop rate hikes until it’s clear that inflation has peaked.

Heavyweight financials rose 0.6 per cent to lead the gains on the Australian benchmark index. The “Big Four” banks climbed between 0.2 and 1.8 per cent.

BHP Group climbed 0.3 per cent after delivering a A$9.6 billion (S$8.8 billion) bid for copper and gold producer OZ Minerals, in what could be the largest mining deal in Australia in 11 years.

OZ Minerals surged 4 per cent and was among the top gainers on the benchmark.

The mining sub-index ended flat even as iron ore prices advanced.

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Australia: Shares jump on boost from financials, energy stocks

Technology and healthcare stocks also ended marginally higher.

Energy stocks fell 0.4 per cent, mirroring the weakness in overnight oil prices, and were the top losers on the benchmark index.

Explaining the sentiment on the local bourse Chesler said, “We do not believe that this is the end of the bear market as inflation is still well above the RBA’s 2 to 3 per cent range and remains sticky but... Investors will continue to make opportunistic purchases.”

Meanwhile, a Reuters poll found that New Zealand’s central bank will hike rates by 75 basis points for the first time next week to cool multi-decade high inflation.

The country’s benchmark S&P/NZX 50 index closed 0.8 per cent higher at 11,380.61. REUTERS