Australian share prices are expected to extend gains next week after the latest US Federal Reserve monetary policy statement suggested its tightening cycle had come to an end, dealers said.
Sentiment got a boost Friday after the Fed hiked rates by an as expected 25 basis points to 5.25 percent and changed the wording of its policy stance, which was read as meaning it would take a softer line going forward.
That was enough to see the market rise 1.53 percent to back above the key 5,000 points level Friday, setting investors up for a strong start to the new Australian fiscal year on Monday.
For the week ending June 30, the benchmark S and P/ASX 200 gained 109.0 points or 2.20 percent to 5,073.9. For the financial year ending June 30, the key index climbed 796.4 points or 18.62 percent.
CMC Markets senior dealer James Foulsham said the Australian market had reacted positively to the Federal Reserve's decision overnight to increase interest rates by 25 basis points to 5.25 percent.
"The local market has been in limbo for the past couple of weeks, stuck in a range between 4,900 and 5,000 (points), but it made a clear breakthrough as it followed the strong US lead," Foulsham said.
"The outlook ... is starting to look a lot more positive again and we may see the market start to push back towards its (previous) highs as some uncertainty around the US interest rate decision has now been removed."
The Reserve Bank of Australia (RBA) was not expected to raise rates at its meeting on monetary policy next week, economists said.
The Australian central bank last increased its official cash rate, by 25 basis points to 5.75 percent, in May.
However, HSBC Australia and New Zealand chief economist John Edwards said a further interest rate rise in Australia next week could not be ruled out.
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