Australia: Shares end higher as sharp rate-hike fears ebb

AUSTRALIAN shares logged their first monthly rise in four, with miners leading gains on Friday ( Jul 29), as signs of an economic slowdown and cooling inflation raised hopes of a less aggressive central bank monetary policy.

The S&P/ASX 200 index ended up 0.8 per cent at 6,945.20, its highest closing level since June 9. The benchmark gained 5.7 per cent in July.

“July has been good for the markets ... With the belief that the market bottom is already in place, risk assets are back in favour, and investors are probably doing some amount of bottom fishing,” said Kunal Sawhney, chief executive officer, Kalkine Group.

The Australian market scaled back rate hike expectations for the Reserve Bank of Australia (RBA) after second-quarter inflation data came slightly below estimates. Economists polled by Reuters expect another 50-basis-point rate hike on Aug 2.

“Investor sentiment got a boost after signs of a slowdown in the Australian economy were visible, which leads to the belief that the RBA may turn dovish next week while deciding on rates,” Sawhney added.

Heavyweight miners led the gains on Friday, rising 1 per cent. The sub-index also logged its best weekly rise since late-March. Sector majors BHP Group and Rio Tinto rose 0.9 per cent and 0.1 per cent, respectively.

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Banking stocks climbed 0.6 per cent with the so-called “big four” banks rising between 0.4 per cent and 0.9 per cent.

Gold stocks rose 3.5 per cent and were the top percentage gainers on the benchmark. The sub-index also marked its best week since mid-April.

New Zealand’s benchmark S&P/NZX 50 index rose 1.5 per cent to 11,492.65, its highest closing level since May 6. NZ50 rose 5.7 per cent in July, its best month since April 2020. REUTERS