Australia: Shares hit five-month high on hopes of Federal Reserve pivot

AUSTRALIAN shares hit a more than five-month high on Friday, buoyed by mining and financial stocks, as a cooler-than-expected US inflation data intensified speculation that the Federal Reserve might ease on its aggressive rate hikes.

The S&P/ASX 200 index rose as much as 2.7 per cent to 7,152.50 points by 2343 GMT, its highest level since June 8. The benchmark was more than 3 per cent higher for the week, set for its best weekly jump in a month.

Heavyweight mining and banking stocks logged solid gains, pushing the benchmark higher. Only eight of the 200 stocks in the benchmark index traded in the red.

US inflation in October rose less than expected, strongly indicating that Fed’s outsized rate hikes since early part of the year are having their intended effect, raising hopes that the central bank could start to dial down its aggressive stance.

“Risk markets rallied strongly as the weaker-than-expected US CPI fanned expectations that the peak in both core and headline inflation is now behind us this cycle, and that a more moderate inflation landscape lies ahead,” ANZ analysts said in a note.

“While it is unwise to read too much into one month’s data, the sigh of relief across markets was understandable.”

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Miners advanced as much as 3.5 per cent to touch their highest since mid-June, with the world’s largest iron-ore producer Rio Tinto jumping 2.8 per cent. Financials were the second-biggest boost to the benchmark, up 2 per cent, with all of the “Big Four” banks posting strong gains.

The energy index jumped 1.8 per cent buoyed by higher oil prices. Sector majors Woodside Energy and Santos rising between 2.4 per cent and 1.5 per cent. Consumers and healthcare stocks gaining 1.9 per cent and 2.7 per cent, respectively. In New Zealand, the benchmark S&P/NZX 50 index was up 2.3 per cent to 11,342.38. REUTERS