Australian shares rose on Thursday led by miners and banks, after encouraging US data renewed hopes of the Federal Reserve cutting interest rates in September.

The S&P/ASX 200 index rose 1.1% to 7,826.300 by 0042 GMT.

The benchmark ended up 0.3% on Wednesday. A flurry of economic data from the world’s largest economy showed signs of a weakening labour market in the United States.

The weekly jobless claims data and the US private payrolls report prompted hopes that the easing labour market would encourage the Fed to start cutting rates.

A rate cut from the US central bank would encourage others, such as the Reserve Bank of Australia, to follow suit. Back in Sydney, rate-sensitive financials gained 0.8% after three consecutive sessions of losses.

The “Big Four” lenders rose between 0.6% and 1%.

Bellwether miners gained as much as 2%, eyeing their best day since May 20, if current trends hold, as iron ore prices hit a four-week high aided by strong near-term demand in top buyer China.

Mining giant BHP Group gained as much as 2%, while Rio Tinto rose 1.8%.

Energy stocks advanced 1.2%, with Woodside Energy rising 0.7%.

Global oil prices rose after a larger-than-expected decline in US crude stocks. Santos rose 4% after reports suggested Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) have been separately considering bids for the gas producer.

Australian shares hit record high; RBA cautious on inflation

Healthcare sector gained 1%, while information technology firms rose 0.5%.

Real estate stocks also jumped 1.3%, while gold stocks advanced 2%.

In New Zealand, the benchmark S&P/NZX 50 index rose 0.1% to 11,805.3100.