Australia: Shares gain as RBA hints at easing cash rate

[BENGALURU] Australian shares rose on Thursday after the central bank signalled it was considering an interest rate cut, while New Zealand stocks looked set to snap their 11-session winning streak.

The S&P/ASX 200 index climbed 0.61 per cent to 6,216.7 by 0016 GMT, led by mining, financials and energy stocks.

In New Zealand, the benchmark S&P/NZX 50 index was down 0.5 per cent to 12,476.07, after adding 6.8 per cent since September-end in the run-up to Oct 17 elections.

Market participants in Australia cheered central bank Governor Philip Lowe's remarks that its board was mulling options to support jobs and businesses, adding that it felt monetary easing would become more effective as coronavirus curbs were lifted.

Goldman Sachs said in a note that the Reserve Bank of Australia's (RBA) dovish tone indicates it may lower the cash rate by 15 basis points to 0.1 per cent and announce a new A$100 billion (S$97 billion) quantitative easing programme to reduce long-term yields at its November meeting.

The central banker's remarks sent the Australian dollar sliding to a one-week low of US$0.7129 against the greenback.

Leading gains on the benchmark index, the metals and mining index jumped 1.7 per cent to its highest in more than three weeks.

Rio Tinto, the world's largest iron ore miner, firmed 2 per cent a day before its quarterly production results, while rival BHP Group L added 3.6 per cent.

Financials stocks, which account for a major chunk of the index, rose 0.3 pre cent.

Westpac Banking Corp and National Australia Bank , two of the "Big Four" lenders, gained 0.2 per cent and 0.3 per cent, respectively.

Energy stocks climbed on the back of an overnight jump in crude prices and Whitehaven Coal's near 7 per cent surge.

The country's biggest independent coal producer, Whitehaven Coal, rallied to the top of the ASX200 index after reporting strong quarterly coal production and sales.

On the New Zealand bourse, A2 Milk Company and Vista Group International were the top percentage losers, down 2.71 per cent and 2.6 per cent respectively.

REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes