Australian shares gained most in four weeks on Tuesday, with all sectors ending in the green, boosted by dovish U.S. Federal Reserve remarks.
The S&P/ASX 200 index closed 1% higher, logging gains for a fourth straight session. The benchmark touched its highest level since Sept. 29.
Top Fed officials on Monday indicated that an unprecedented rise in Treasury yields, which has a direct impact on the cost of households and businesses, could keep the central bank away from further increases in its short-term policy rate.
Australian shares extend gains as energy and gold stocks rally
Investors now await the U.S. consumer price index data due later this week for further cues on the central bank’s policy move.
It’s “a fair expectation” that the more cautious the Fed members are, the less likely interest rates will continue to rise, Hebe Chen, market analyst at IG Markets, told Reuters.
“This interpretation has successfully rejuvenated stagnant risk appetite and especially been warmly welcomed by capital-intensive tech sectors,” Chen added.
Back in Australia, technology stocks gained over 3%, with sector leaders Block Inc and Xero Ltd adding 1.4% and 4.4%, respectively. The sub-index marked its biggest percentage gain in one month.
Energy stocks touched their highest in one week as news of the conflict between Israel and the Palestinian group Hamas sparked an oil rally due to supply concerns.
Woodside Energy and Santos rose 1.3% and 0.5% respectively.
Shares of Origin Energy climbed 5.5% after the country’s competition regulator approved Brookfield Corp’s takeover of the power producer.
Financials advanced 0.6%, with the country’s big four banks adding between 0.3% and 0.8% each.
Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index climbed 0.8%, marking its biggest intra-day percentage gain since Sept. 29.
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