Australian shares climbed on Wednesday as financials and miners led a broad rally after domestic February inflation data showed cooling consumer prices, bolstering hopes for local central bank interest rate cuts.
The S&P/ASX 200 index rose for the fifth consecutive session to end 0.7% higher at 7,999.0 points, its highest closing level since March 7.
February inflation data revealed easing price pressures across half the consumer basket as key measures, like core services and housing costs, hit multi-year lows despite the 2.4% annual rise.
Citi analysts expect the Reserve Bank of Australia (RBA) to keep rates unchanged at their April meeting, but reduce by 25 basis points in May and August each.
Leading the charge, financial stocks jumped 1.1% to their highest in nearly three weeks after a three-session gaining run. The “Big Four” banks added between 0.5% and 3%.
Anticipation of upcoming earnings reports in May and activity related to the 45-day rule for franking credits is spurring retail investor interest, Henry Jennings, senior analyst at Marcus Today newsletter, said.
Australian shares end little changed as miners fall offsets broader gain
The 45-day rule requires investors to hold shares for at least 45 days to qualify for valuable dividend tax credits, often driving increased trading ahead of dividend season.
Meanwhile, the Australian government doled out fresh tax cuts on Tuesday alongside other cost-of-living relief measures ahead of the May elections, tipping the budget back into the red.
Miners closed 0.8% higher after rising 1.9% on the day as copper scaled a new peak.
Rio Tinto, BHP and Fortescue added between 0.5% and 1.5%.
Consumer stocks rose 1% as easing inflation supported a rebound after two sessions of profit-taking. Gold stocks and real estate firms advanced 0.6% and 1.2%, respectively.
Healthcare, the only laggard, lost 0.5%, with the country’s second priciest stock CSL sliding over 1%.
Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 1.2% to 12,334.18 points, marking its fifth straight day of gains.
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