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Australia: Shares inch up on rate cut hopes; New Zealand at record high
[BENGALURU] Australian shares inched up on Thursday, as weaker than expected local jobs data supported expectations for a central bank rate cut, although broader weakness in regional markets capped gains.
The S&P/ASX 200 index rose 0.40 points or 0.01 per cent to 6,284.60 by 0141 GMT, having risen as much as 0.3 per cent earlier. The benchmark rose 0.7 per cent on Wednesday.
Stocks had rallied in the previous session after data showed wage growth stagnating last quarter, fuelling market expectations that the Reserve Bank of Australia (RBA) would cut interest rates soon.
The RBA pinned its hopes on a robust labour market to lend support for a cooling economy. Markets took signs of labour market weakness as an argument for rate cuts.
The April jobs report showed that unemployment rate crept to 5.2 per cent from 5.0 per cent. It was expected to have ticked up to 5.1 per cent.
"Yesterday's wages data showed no signs of an uptick outside Victoria so wages are not going to rescue households. And we know the NAB business survey showed a deterioration as well in the labour market," said Greg McKenna, founder of McKenna Macro, in a note.
"That makes the release of the employment data today super important for the Aussie dollar and for expectations about the RBA", he added, referring to RBA's rate decision.
Also offering some support, US Treasury Secretary Steven Mnuchin said he will likely travel to China soon to continue trade talks. Markets were rattled by the sudden worsening of tensions earlier this week.
Energy stocks surged as much as 1.7 per cent, on the back of rising oil prices.
Origin Energy and Santos rose as much as 2.8 per cent and 2.1 per cent, respectively. Woodside Petroleum put on 1.2 per cent.
Miners also rose, boosted by gold stocks. Top gold miner Newcrest Mining rose 1 per cent while Northern Star Resources gained 1.1 per cent .
BHP Group and rival Rio Tinto edged higher in early trade, but slipped slightly thereafter.
Meanwhile, Fortescue Metals Group rose as much as 2.8 per cent after a lacklustre performance in the previous session.
Financial stocks slumped, after Australia's second-biggest lender Westpac Banking tumbled as much as 4.7 per cent to a one-month low as shares traded ex-dividend.
Westpac's drop offset modest gains from Commonwealth Bank of Australia and Australia and New Zealand Banking Group.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index rose 69.02 points or 0.7 per cent to 10,200.60, hitting a record high.
Dairy giant a2 Milk Company rose 1.1 per cent, while Air New Zealand added 0.4 per cent.