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Australia shares mark fifth weekly gain on hopes of policy easing

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[BENGALURU] Australian shares closed higher on Friday, marking their fifth straight weekly gain, as dismal jobs data stoked expectations of a domestic rate next month amid slowdown concerns.

The S&P/ASX 200 index ended up 0.2 per cent, or 13.3 points, at 6,730.80. The benchmark had finished 0.5 per cent higher on Thursday.

Australian employment rose in August but the jobless rate worsened to a one-year high of 5.3 per cent as more people looked for work, a sign of spare capacity in the labour market that reinforced expectations of more central bank stimulus.

Financial futures are now predicting a 76 per cent chance of a cut by the RBA to 0.75 per cent at its Oct 1 policy meeting, from a 50-50 probability before the data.

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"The fact that there is a confidence that the RBA will step in here and be aggressive with monetary policy and that it will happen as soon as next month, that is a positive for Australian stocks," said Kyle Rodda, market analyst at IG Markets.

RBA governor Philip Lowe's speech on Sept 24 will be closely watched for any hints on the timing of the stimulus, which may further shape market expectations.

Nearly all components of the Australian benchmark climbed on the rate cut expectations, with the mining sector, as the top driver of gains. The subindex, marked its fourth straight weekly gain, helped by gold stocks as a weak dollar spurred more buying of the precious metal.

Gold and copper explorer Aurelia Metals closed 7 per cent higher, while OceanaGold Corp closed at a five-week peak.

With three of Australia's "big four" banks trading higher, the financial sub-index advanced about 0.3 per cent, marking its fifth straight weekly gain.

Melbourne-based IOOF Holdings rose about 8 per cent to its highest since early May, and was among one of top gainers in the main benchmark, after a court ruled that the wealth manager did not breach pension industry laws, as alleged by financial regulators in December, and that it would not disqualify top IOOF executives.

The energy sector finished the session a tick higher, as oil prices rose on fears of longer-than-expected supply shortfalls following attacks on key Saudi oil facilities.

Oil and gas heavyweights Woodside Petroleum and Santos each ended about 1 per cent higher.

Meanwhile, New Zealand's benchmark S&P/NZX 50 index rose 0.3 per cent or 28.34 points to finish at 10,829.39, with consumer sectors leading gains. 

REUTERS