Australia: Shares rise on commodities, tech boost after Fed softens stance

AUSTRALIAN shares climbed on Thursday (May 5), with commodity and technology stocks leading gains, tracking US peers after the Federal Reserve struck a less hawkish tone than was expected while raising rates by half a percentage point.

The S&P/ASX 200 index ended up 0.8 per cent at 7,364.7, clocking gains for the first time this week. The benchmark closed 0.2 per cent lower on Wednesday.

Fed Chair Jerome Powell said members were not “actively considering” a 75-basis-point rate hike, tempering some market expectations for an aggressive tightening path.

Highlighting the implications of the Fed’s widely expected rate hike, CommSec market analyst Steven Daghlian said markets reacted positively to the Fed’s decision as it was in line with what was already anticipated with no major surprises.

Fed chair ruling out a more aggressive rate hike is helping US markets with Australia following suit, Daghlian added. Local miners advanced 1.6 per cent to snap a 3-day losing streak, with heavyweights BHP and Fortescue Metals rising 0.2 per cent and 3.3 per cent, respectively.

Domestic technology shares surged 2.5 per cent to mark their best day in a month, with ASX-listed shares of Block and software producer Xero gaining 2 per cent and 3.6 per cent, respectively.

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Shares of Rio Tinto jumped 0.5 per cent after the miner said it was open to talks with the Serbian government about its Jadar lithium project. Leading gains on the benchmark, gold miners jumped 3 per cent, posting their best day since early March, with sector leaders Newcrest Mining and Northern Star climbing 2.4 per cent and 1.8 per cent, respectively.

The energy sub-index surged 2 per cent after oil prices extended gains on the back of a European Union proposal for new sanctions against Russia. Woodside Petroleum and Santos rose 2 per cent and 1.2 per cent each.

Meanwhile, shares of Qantas Airways slipped as much as 2 per cent after the company said it would buy the remaining 80 per cent stake in Alliance Aviation Services. REUTERS