You are here
Australian shares rise on China stimulus, RBA cut hopes; NZ up
[BENGALURU] Australian shares closed at a six-month high on Wednesday, as China's planned fiscal stimulus supported mining stocks and increasing expectations of domestic interest rate cuts lifted broader sentiment.
The S&P/ASX 200 index rose 0.8, or 46.3 points, to 6,245.60. The benchmark declined 0.3 per cent on Tuesday.
Economic growth came in at 0.2 per cent in the fourth quarter, slower than the 0.3 per cent increase forecast by economists in a Reuters poll.
The dismal growth challenges the Reserve Bank of Australia's (RBA) optimistic economic outlook, with investors wagering that the central bank would cut interest rates to stimulate the economy.
Australia's top investment bank Macquarie has revised its rate outlook to two cuts this year from no change previously, as did Westpac and JPMorgan.
Financial shares ended 0.7 per cent higher, with the "Big Four" banks gaining with the range of 0.9 per cent and 0.2 per cent. Commonwealth Bank of Australia and Westpac Banking Corp added 0.9 per cent each.
The metals and mining index lead gains among the sectors, rising 1.2 per cent on hopes that further stimulus measures by China would help support the cooling economy.
A boost to the Chinese economy bodes well for Australian miners, which export their raw materials to China. Global miners BHP Group Ltd and Rio Tinto Ltd gained 0.9 per cent and 1.1 per cent, respectively.
Meanwhile, the country's largest department store chain Myer Holdings Ltd jumped 11 per cent after the struggling company returned to profitability in the first half.
The positive results also helped boost peers Woolworths Group and Harvey Norman Holdings Ltd, which gained 1 per cent and 3.8 per cent, respectively.
New Zealand's benchmark S&P/NZX 50 index inched up 0.16 per cent or 15.31 points to finish the session at 9,415.00.
Electricity retailer Meridian Energy Ltd added 1.7 per cent, while Auckland International Airport Ltd gained 0.2 per cent.