Australian share prices closed 0.56 percent higher on Monday as investor sentiment was buoyed by a strong lead from Wall Street Friday, dealers said. They said sentiment got a boost after lower-than-expected US economic growth data on Friday cooled expectations that the Federal Reserve will hike interest rates again next month.
At the same time, trade was cautious ahead of the Reserve Bank of Australia monetary policy meeting on Tuesday, with the central bank widely expected to hike interest rates 25 basis points to 6.0 percent after a sharp spike in local inflation.
The benchmark S and P/ASX 200 rose 27.7 points to 4,986.0 while the broader All Ordinaries index advanced 24.4 points to 4,957.1.
Turnover was 1.02 billion shares worth 3.36 billion Australian dollars (2.57 billion US), with gains leading falls 637 to 452 with 318 stocks unchanged. CMC Markets' dealer Josh Whiting said the outlook for interest rates was likely to become a little clearer when the central bank makes its quarterly monetary statement on Friday.
"Softer than expected US growth data on Friday encouraged the bulls by cooling expectations of US rate hikes but gains in the local market were capped ahead of the all-important decision from the Reserve Bank of Australia due this Wednesday," he said.
National Australia Bank rose 0.23 dollars to 35.90 dollars, Commonwealth Bank gained 0.15 to 44.80, ANZ also climbed 0.15 to 25.25, Westpac added 0.07 to 22.00 and St George was up 0.29 at 28.65.
BHP Billiton gained 0.07 to 27.77 but Rio Tinto lost 0.25 to 74.36 ahead of its first-half earnings report on Thursday. Telstra added 0.03 to 3.82 while Qantas slipped 0.01 to 3.05.
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