Australia: Shares rise as fears ease about big Federal Reserve rate hike
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AUSTRALIAN shares rose on Monday as comments from two US central bank officials eased fears about a bigger interest rate hike this month, while Suncorp jumped after Australia and New Zealand Bank said it would buy the insurer’s banking business.
The S&P/ASX 200 index gained 0.4 per cent by 1250 GMT, with all sectors except healthcare trading in positive territory. The benchmark had fallen 0.7 per cent on Friday.
Market participants felt relieved after remarks from two US Federal Reserve officials indicated a 75-basis-point rate hike at the central bank’s July 26-27 meeting, rather than a full-point increase.
In Australia, energy stocks led the gains for the day, climbing as much as 2.4 per cent after Brent oil prices jumped on Friday.
Miners advanced even after iron ore prices in China slumped 10 per cent on Friday over weak demand outlook in Asia’s largest economy.
Index majors Rio Tinto, Fortescue Metals Group and BHP Group climbed between 0.5 per cent and 2.3 per cent.
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Financials climbed about 0.9 per cent, with three of the “big four” banks rising between 0.9 per cent and 1.6 per cent. Technology stocks added 1 per cent, with Block Inc’s Australian shares gaining about 4.3 per cent.
Healthcare stocks were the only laggards, dropping 1.1 per cent.
In corporate news, Australia and New Zealand Bank said it would buy Suncorp’s banking operations for A$4.9 billion (S$4.65 billion) in a bid to bolster its customer growth and home loan growth.
Shares of the country’s fourth-biggest lender were on a trading halt, while those of Suncorp jumped nearly 6 per cent to their highest since May 31.
New Zealand’s benchmark S&P/NZX 50 index rose 0.4 per cent to 11,181.20.
Consumer inflation outpaced expectations in the second quarter and remained at three-decade highs as price pressures remain widespread.
The consumer price index rose 7.3 per cent, speeding up from a 6.9 per cent gain in the first quarter, and the fastest since the June quarter of 1990 when prices increased 7.6 per cent. REUTERS
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