The Business Times

Australia: Shares rebound as investors cheer Fed’s rate hike decision

Published Thu, Jun 16, 2022 · 09:44 AM

AUSTRALIAN shares rose on Thursday, led by gains in financials and tech, which tracked the Wall Street higher after investors cheered the US Federal Reserve’s decision to hike interest rates by three-quarters of a percentage point.

The S&P/ASX 200 index snapped a four-day losing streak to climb 1 per cent in early trade. The benchmark fell 1.3 per cent on Wednesday.

The Fed’s decision to hike rates by 75 basis points – a widely expected move – was welcomed by investors as they viewed that the economy was better off in the long run if the Fed succeeded in reining in prices now.

Tech stocks climbed as much as 1.9 per cent to their highest level in a week.

EML Payments climbed 6.3 per cent to lead gains on the index, followed by Novonix, up 4.9 per cent. Financials advanced 1 per cent with the big four banks gaining between 0.3 per cent and 1.5 per cent.

Meanwhile, Link Administration’s shares slumped as much as 10.7 per cent to their lowest level in over two years after the country’s competition regulator tabled concerns about Canadian firm Dye & Durham Ltd’s (D&D) proposed C$3.2 billion (S$3.44 billion) acquisition of the firm. 

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Gold stocks rose 2.3 per cent on higher bullion prices. 

Heavyweights Newcrest Mining and Northern Star Resources were up 2.1 per cent and 1 per cent, respectively.

Mining stocks also advanced 1.2 per cent, even though iron ore prices fell, but upbeat economic data from top consumer China for the month of May pushed copper and aluminium prices higher.

Energy stocks shed 0.9 per cent on a decline in oil prices after the Fed’s announcement, as markets worried that there could be a fall in demand for the commodity which trades in the greenback. 

New Zealand’s benchmark S&P/NZX 50 index rose 1 per cent and was headed for its best session in two weeks.

 The country’s economy unexpectedly contracted in the first quarter as a slump in exports swamped strong domestic spending. REUTERS

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