Australian shares ended higher on Wednesday, aided by gains in the financial stocks after the country’s biggest lender posted upbeat results.
The S&P/ASX 200 index rose 0.4% to 7,338 points, lifted by the financial index which closed up 1.21%. The benchmark ended 0.03% higher on Tuesday.
Financial stocks rallied after the Commonwealth Bank of Australia posted record annual profit leaving investors less concerned about the second-half outlook even as the lender warned of rising debt arrears and shrinking margins.
The rest of the “big four” banks also closed higher between 0.8% to 2.2%.
“I believe the market was possibly expecting worse numbers than reported,” said Brad Smoling, managing director at Smoling Stockbroking.
The strong results, however, offset concerns about the global economic outlook following disappointing trade figures from China, confirming that the recovery in the world’s second-biggest economy is losing steam.
Investor sentiment was also weighed down by credit ratings agency Moody’s downgrading several US lenders.
“Rather than China or US banks, potential issues with the Australian property sector are of the main concern for CBA and others,” added Smoling.
Markets are now waiting for the US inflation report on Thursday, which will determine the course of the Federal Reserve’s future interest rate path.
Meanwhile, the Reserve Bank of Australia is poised to release its third-quarter inflation data in October.
Australian shares close little changed as key inflation readings eyed
In Sydney, miners pared losses to 0.2%, with behemoths BHP Group, and Fortescue rising 0.4% and 0.2%, respectively.
Gold stocks gained 0.7% after bullion prices rebounded from one-month lows hit in the previous session.
GOL/ Sector heavyweight Newcrest Mining also pared losses, inching 0.5% higher. Energy and tech stocks climbed 0.04% and 0.9% respectively.
New Zealand’s benchmark S&P/NZX 50 index fell 0.3% to end the day at 11,838.26 points.
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