SYDNEY: Australian shares closed higher on Wednesday, led by technology and healthcare stocks, as investors globally awaited the outcome of the U.S Federal Reserve’s meeting later in the day.
The S&P/ASX 200 index ended 1.1% higher at 7,175.2 points.
Rising inflationary pressures, geopolitical worries, and volatile commodity prices have led to choppy trading sessions since late-February, with growth-focused stocks taking much of the beating.
The outcome of the Fed’s two-day meeting later in the day is in focus, where it is expected to raise interest rates by 25 basis points. Traders will also eye projections by the central bank on its bond-buying program, inflation, and the timeline of more rate hikes.
A slightly dovish stance may be adopted by the Fed despite a rate hike, as a pullback in commodity prices have eased some of the price pressures, said Damien Rooney, director of equity sales at Argonaut.
Meanwhile, technology stocks led gains on the Australian benchmark, climbing as much as 3.7%.
“The outperformance of tech stocks might seem startling, at a time of rate hike,” said Kunal Sawhney, CEO of Kalkine Group.
“However, this rise can explained as investors usually pick up high-quality stocks at low prices following a huge sell-off.”
Financial stocks rose for a third straight session, hitting their highest since Feb. 21. The “Big Four” banks firmed 0.1%-1.9%
Energy stocks gained about 0.2% after crude prices rose on persisting Russia-Ukraine tensions. Index majors Woodside Petroleum Ltd and Santos Ltd rose about 0.2% and 0.6%, respectively.
Miners climbed 0.3%, as iron ore prices rebounded from a two-week low in China, the world’s largest producer of steel.
Travel stocks gained as New Zealand reopened its borders. Major carrier Qantas Airways added 4.1%. New Zealand’s benchmark S&P/NZX 50 index ended 0.6% higher at 11,847.1.
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