Australia: Shares hit five-month high on hopes of less aggressive Fed
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AUSTRALIAN shares rose nearly 3 per cent on Friday (Nov 11), joining a global rally as cooler-than-expected US inflation data raised hopes that the Federal Reserve would scale back its hefty rate hikes.
The S&P/ASX 200 index closed 2.8 per cent higher at 7,158, hitting its highest in five months, in broad-based buying. The index rose 3.9 per cent to record a third straight weekly gain.
US consumer prices rose less than expected in October, pushing the annual increase below 8 per cent for the first time in eight months, the strongest signs yet that inflation was slowing.
“We have seen this before that the inflation number is better than expected, but continues as a one-off,” said Azeem Sherrif, a market analyst at CMC Markets.
Sherrif said consistency needed to have a positive sentiment towards inflation actually coming down.
Heavyweight miners gained 3.8 per cent, as iron ore prices jumped after China stressed the need to minimise Covid-19‘s impact on the economy, raising hopes for a more targeted approach to contain outbreaks.
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BHP Group, Rio Tinto and Fortescue Metals Group climbed between 3.8 and 5.8 per cent.
Tech stocks tracked Wall Street gains to close 5 per cent higher, with the ASX-listed shares of Block jumping 11.5 per cent.
Financials soared 2.1 per cent, with the “Big Four” banks gaining between 1.1 and 2 per cent.
Westpac and National Australia Bank have quietly relaxed some home lending standards, banking and mortgage-broking sources said.
Energy stocks gained 0.7 per cent, as crude oil prices bounced back following the US inflation data and on hopes that sturdy demand will offset new Covid restrictions in China.
Woodside Energy and Beach Energy climbed 1.4 per cent and 3.5 per cent, respectively.
Among individual stocks, Ramsay Health Care jumped 5.8 per cent after the country’s largest private hospital operator issued optimistic outlook for 2023 and 2024 fiscal years.
New Zealand’s benchmark S&P/NZX 50 index jumped 2 per cent to 11,311.76. For the week, it gained 0.7 per cent. REUTERS
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