Australian shares closed at their highest point in nearly 12 years on Wednesday as investors cheered signs of progress in the trade talks between the United States and China.
The S&P/ASX 200 index rose 0.8%, or 52.10 points, to close at 6,776.70. The benchmark gained 0.5% on Tuesday.
Many markets rose after Bloomberg on Tuesday reported that senior U.S. officials will head to Shanghai next week to conduct face-to-face talks with their Chinese counterparts.
White House economic adviser Larry Kudlow called the renewed negotiations a “good sign”.
Financials rose 1.3% to their best close since August 2018, with the “Big Four” banks gaining between 0.8% and 1.7%.
Commonwealth Bank of Australia advanced 1% and National Australia Bank added 1.7%.
Investors have also been scooping up bank stocks in recent days on expectations of monetary policy easing by month’s end by the world’s major central banks, the U.S. Federal Reserve and the European Central Bank.
The Australian dollar fell on Wednesday as Westpac brought forward the timing of its forecast for the next Reserve Bank of Australia rate cut to October from November, citing unemployment and inflation pressures.
“Weakness in the Aussie dollar has also helped lift most sectors across the board today,” said Damian Rooney, director of equity sales at Argonaut.
Oil prices extended gains on Wednesday as rising tensions Middle East tensions fuelled concerns about supply disruptions, elevating energy stocks.
Woodside Petroleum Ltd and Oil Search both rose 0.7%.
The metals and mining sector dropped 0.8% as iron ore prices fell up to its weakest in more than two weeks.
Mining behemoths BHP Group and Rio Tinto declined 0.6% and 2.2%, respectively, while Fortescue Metals Group fell 0.6%.
Gold miner Regis Resources slumped 11.8% and was the biggest loser on the benchmark index.
New Zealand’s S&P/NZX 50 index closed down 0.5%, or 54.71 points, to 10,812.54. The benchmark had hit a record high on Tuesday.
Retirement village operator Ryman Healthcare and a2 Milk Co were the worst performers on the index, falling 2.8% and 2.5%, respectively.