Australia: Shares rise on commodity boost; central bank meet in focus

AUSTRALIAN shares rose on Tuesday, boosted by gains in energy and mining stocks as commodity prices firmed globally, while investors also awaited the central bank’s interest rate decision.

The S&P/ASX 200 index rose about 0.5 per cent to 6,885.4 by 0055 GMT. The benchmark closed 0.3 per cent higher on Monday. 

Market participants expect the Reserve Bank of Australia to raise key policy rates by 50 basis points for the fourth consecutive time at its policy meeting at 0430 GMT, in a bid to temper red-hot inflation pressures, which had hit a two-decade high, according to a Reuters poll. 

However, the poll also indicated the central bank, which has raised rates by a total of 175 basis points since May to 1.85 per cent, could moderate the pace of hikes for the rest of the year.

“The market is pricing in a peak cash rate a bit above 3.8 per cent by mid-2023,” analysts from ANZ Research wrote, “Today’s announcement will need to be on the hawkish side to get the market to price more in.”

Leading gains on the benchmark index, miners rose as much as 1.5 per cent, after iron ore prices rebounded in China despite lingering Covid-19 concerns, with the mining triumvirate of Rio Tinto, Fortescue Metals and BHP Group gaining between 0.3 per cent and 1.8 per cent. 

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Energy stocks gained 0.8 per cent, tracking high Brent crude prices, with sector heavyweight Santos jumping 0.2 per cent.

Domestic technology stocks climbed 1.2 per cent higher, with index majors including accounting software firm Xero and ASX-listed shares of Block Inc rising 1.7 per cent and 0.2 per cent, respectively.

The financial subindex firmed about 0.1 per cent, with National Australia Bank and Westpac gaining 0.2 per cent and 0.1 per cent, respectively.

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Australia: Shares end higher on commodity boost, RBA decision in focus

In New Zealand, however, the benchmark S&P/NZX 50 index fell about 0.2 per cent to 11,594.9. REUTERS