The Business Times

Australia: Shares rise most in 10 weeks on hopes of slower rate hikes

Published Thu, Sep 8, 2022 · 03:40 PM

AUSTRALIAN shares rose on Thursday (Sep 8) by their most in more than 10 weeks, as the country’s top central banker signalled a slower pace of interest rate hikes, easing worries about further aggressive tightening.

The S&P/ASX 200 index closed 1.77 per cent higher at 6,848.7 after 2 straight sessions of losses.

Reserve Bank of Australia governor Philip Lowe said rates were closer to neutral levels after a run of hikes, but there was much uncertainty about how much further they might have to rise to bring demand back into line with supply.

“The fact that Lowe is not as hawkish as feared is more of the icing on the cake... considering the unscored elements that he brought on table this week,” said Hebe Chen, a market analyst at IG Australia.

Re-emphasising that households have built up large financial buffers, which contribute to the persisted pricing pressure, Lowe said, “if that continues to be a case, inflation will likely stay with higher interest rates.”

Export-reliant miners rose about 2.8 per cent as Dalian iron ore futures climbed after the Chinese city of Zhengzhou said it would start building stalled housing projects, offering some relief to markets worried about weak steel demand in China.

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Mining heavyweights Rio Tinto, BHP Group and Fortescue Metals gained between 1.8 per cent and 5.1 per cent.

Tech stocks advanced 3.2 per cent, benefiting from the mildly dovish comments made by the top central banker and tracking the technology-heavy Nasdaq.

Cloud services provider Megaport led gains on the sub-index with a 12.8 per cent jump, while battery maker Novonix rose 11.7 per cent and payments solutions provider EML Payments climbed 7.9 per cent.

Among individual stocks, payments platform Tyro soared 31.5 per cent to a more than 4-month high after rejecting an unsolicited takeover offer from private equity firm Potentia Capital Management and a group of investors.

Link Administration jumped 6.3 per cent after the Australian competition regulator said it would not oppose a A$2.47 billion (S$2.3 billion) buyout proposal for the registry firm from Canadian firm Dye & Durham.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 1.1 per cent to 11,677.93. REUTERS

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