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Australia: Shares jump on rising chance of Federal Reserve cuts; New Zealand touches record
[BENGALURU] Australian shares surged on Friday with gains across the board after comments from a top Federal Reserve official virtually confirmed there will be a US rate cut late this month.
At 0204 GMT, the S&P/ASX 200 index was up 0.8 per cent or 49.8 points to 6,698.9.
If the midday gains stands, Friday will be the benchmark's best day since June 19.
The benchmark was on track to finish the week in the black, despite losing 0.4 per cent on Thursday.
New York Fed President John Williams on Thursday emphasised the importance of acting quickly to arrest any weakness in the US economy and said policymakers cannot afford to keep their "powder dry" and wait for potential economic problems to materialise.
Stephen Innes, managing partner at Vanguard Markets in Bangkok, said the Fed "looks primed to deliver on market wishes of 75 basis points in cuts for 2019 while not ruling out a policy bazooka 50 bp cut in July as Fed speakers one by one stick to the script unwavering from the current dovish guidance."
The dovish remarks were welcomed by investors who have been hoping for aggressive policy easing by the Fed and prompted heavy buying across the sectors, with advancing issues nearly double the decliners
Heavyweight financials were on track for their best day in more than two weeks, with the Big Four banks gaining between 1 per cent and 2.2 per cent.
Among them, National Australia Bank was the biggest mover as traders cheered its hire of Ross McEwan, credited with turning around Royal Bank of Scotland, as its new chief executive.
The Fed officials' remarks also boosted gold, sending Australian miners of the precious metal to their highest in nearly eight years.
Northern Star Resources reached a record high and was among the top performers on the benchmark, while Resolute Mining Ltd hit a more than two-year peak.
The broader mining sector also advanced, with Rio Tinto rising 0.9 per cent.
New Zealand's benchmark S&P/NZX 50 index rose 0.2 per cent or 23.5 points to an all-time high of 10,764.59.
The benchmark was headed for its sixth consecutive week of gains.
The biggest gainers were local-listings of Westpac Banking Corp and Australia and New Zealand Banking Group, which rose 0.6 per cent and 1 per cent.