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Australian shares end at best in over 11 years as US-China resuming trade talks
[BENGALURU] Australian shares ended at their best since the global financial crisis on Wednesday, as investors took heart from the United States and China rekindling trade talks, expectations for lower US interest rates, and the European Central Bank's surprise dovish tilt.
Australian resource stocks gained the most from US President Donald Trump saying officials from both sides would prepare for his meeting with China's President Xi Jinping during a G-20 summit in Japan next week.
The S&P/ASX 200 index climbed 1.2 per cent to 6,648.1, its highest since December 2007. It had risen 0.6 per cent on Tuesday when Australia's central bank had pointed to further policy easing in the future.
Australian Prime Minister Scott Morrison will need to secure just three votes in the country's upper house to pass legislation, with focus on his major re-election policy of A$158 billion in tax cuts for middle-income earners.
China is the biggest buyer of Australia's resource exports, so metals and mining stocks were the biggest gainers on the day, having added 1.6 per cent to a near eight-year best.
Mining behemoth BHP Group rose 1.9 per cent.
Energy stocks also advanced, with Woodside Petroleum and Santos both gaining over 2 per cent.
The US Federal Reserve's policymakers wrap up a two day meeting later in the global day. While few analysts expect a rate cut this time, chances of one later, maybe as early as next month, appear high, and investors are waiting to see how dovish the committee's statement sounds.
Helping the general improvement in risk sentiment, European Central Bank (ECB) governor Mario Draghi said on Tuesday the ECB would ease policy again if inflation failed to accelerate. Mr Draghi's surprising turnaround on easing sparked speculation of a worldwide wave of central bank stimulus.
Financial stocks sub-index, rallied over 1 per cent to its best level in nine months. The country's "Big Four" banks gained between 0.4 per cent to 1.4 per cent.
In other sectors, Coles Group extended gains to close at a record high after the firm unveiled a A$1 billion cost cutting plan on Tuesday.
New Zealand's benchmark S&P/NZX 50 index rose 1.1 per cent to 10,304.83, an all-time best.
Fisher & Paykel Healthcare Corporation was the top gainer, having notched 3.2 per cent higher.