Australian shares ended higher on Wednesday, supported by banks and miners and as insurer Suncorp jumped on strong first-half results, while less-hawkish-than-feared comments from US Federal Reserve Chair Jerome Powell also boosted risk appetite.
The S&P/ASX 200 was up 0.4% at 7,530.10 points. The benchmark closed 0.5% lower on Tuesday. “Whilst the ASX is higher today, there’s caution in the air,” said Matt Simpson, senior market analyst at City Index. “On one hand, its retracing higher as Wall Street took (Fed Chair) Jerome Powell’s comments as less hawkish than originally feared, yet investors are also mindful of the potential for higher domestic interest rates.”
The Reserve Bank of Australia raised its cash rate by 25 basis points to a decade-high of 3.35% on Tuesday and reiterated that further hikes would be needed, a more hawkish policy tilt than many had expected.
Australian Treasurer Jim Chalmers said on Wednesday signals by the central bank that it had not stopped tightening policy were “pretty straightforward.”
Meanwhile, Powell’s comments on Tuesday renewed investor hopes for a less-aggressive monetary policy that wavered after a strong US jobs report last Friday.
Australian shares end lower after central bank warns of more rate hikes
Financials climbed 0.9%, with shares of National Australia Bank and Australia and New Zealand Banking Group adding 1% and 0.5%, respectively. Miners advanced 0.9%.
BHP Group and Rio Tinto rose 0.2% and 1.1%, respectively. Fortescue Metals surged 2%. The fourth-largest iron ore miner globally entered into a deal with the Gabonese government for the Belinga iron ore project in West Africa and plans to begin mining in the second-half of 2023.
Energy stocks closed 0.2% higher in their fourth straight session of gains as they tracked rising oil prices.
Among individual stocks, construction materials maker Boral soared 12.8% after its first-half underlying earnings beat estimates. Insurer Suncorp jumped 4.6% on posting an upbeat first-half cash earnings.
New Zealand’s benchmark S&P/NZX 50 ended 0.7% higher at 4,847.51 points.
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