The Business Times

Australia: Shares rise after weak wage data, CSL caps gains

Published Wed, Aug 17, 2022 · 04:06 PM

Australian shares inched higher on Wednesday (Aug 17), after the country’s wage data missed estimates presenting a case for the Reserve Bank of Australia to rein in the pace of rate hikes, even as poor annual results from biotech giant CSL capped the gains.

The S&P/ASX 200 index rose 0.3 per cent to 7,127.70. The benchmark rose 0.6 per cent on Tuesday.

Figures from the Australian Bureau of Statistics showed the wage price index rose 0.7 per cent in the June quarter as red-hot demand for labour drove unemployment to generational lows. The data, however, missed forecasts of a 0.8 per cent increase, leading the market to lengthen the odds on another half-point rate hike in September.

Investors’ focus also remained on the ongoing corporate earnings. “While the US and Australia earnings seemingly have formed the view that corporate performance is mostly better than expected, the other fact is that the earnings growth is widely expected to decline further in the next quarter,” said Hebe Chen, market analyst at IG Markets.

Domestic mining stocks rose 0.4 per cent on strong base metal prices. Sector majors BHP Group and Rio Tinto, both rose 0.8 per cent.

Healthcare stocks dipped 0.8 per cent, dragged by a 1.3 per cent fall in heavyweight CSL. The Australian biotech giant posted a drop in annual profit due to declining donations of blood plasma, the key ingredient of its products, and flagged higher staffing costs as collection volumes returned to pre-pandemic levels.

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Energy stocks fell 0.6 per cent in their third consecutive session of losses.

Santos fell 2.4 per cent after a surprise announcement to move ahead with developing a US$2.6 billion Alaskan oil project, and posting a record first-half profit.

Across the border, the Reserve Bank of New Zealand delivered its seventh straight interest rate hike and signalled a more hawkish stance over coming months. The central bank raised the official cash rate by 50 basis points to 3.0 per cent, in line with market expectation.

New Zealand’s benchmark S&P/NZX 50 index ended 0.05 per cent higher at 11,852.93. REUTERS

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