Australia: Energy, miners lift shares; Fed, inflation in focus

AUSTRALIAN shares closed higher on Tuesday (Jul 26), supported by mining and energy stocks, even as investors remained cautious ahead of local inflation data and a likely sharp US interest rate hike.

The S&P/ASX 200 index was up 0.3 per cent at 6,807.30.

“The market is just treading water right now,” said Brad Smoling, managing director at Smoling Stockbroking.

Investor focus is on the US Federal Reserve meeting and Australia’s inflation data due on Wednesday.

Futures trade points to a 75 basis point (bps) Fed hike, with about 10 per cent risk of a 100 bps hike, while traders expect a 50 bps hike in Australia next week with about a 20 per cent chance of a 75 bps hike.

Smoling said it will be interesting to see the impact of a higher-than-expected rate hike on Australian banks. “More rate hikes passed on by Australian banks will have a very big impact across the property sector, the retail sector and anything associated with that.”

Domestic miners rose 1.8 per cent on the back of higher iron ore prices. Sector majors BHP Group and Rio Tinto advanced 2.5 per cent and 1.9 per cent, respectively.

Crude prices rose for a second day and lifted Australian energy stocks by 2.8 per cent amid increasing concerns over tightening European supply after Russia cut gas supply through a major pipeline.

Woodside Energy Group rose 2.8 per cent and Whitehaven Coal firmed 6.4 per cent.

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Australia: Mining and energy stocks push shares higher

Gold stocks fell 1.9 per cent, as bullion prices flitted in tight range after investors refrained from taking big bets on the yellow metal ahead of Fed’s rate decision. Shares of heavyweight Newcrest Mining dropped 3.1 per cent.

Healthcare stocks slumped nearly 1 per cent to extend losses to a third session.

New Zealand’s benchmark S&P/NZX 50 index dropped 0.3 per cent to end the session at 11,166.56. REUTERS