Australian shares set for third day of gains as weaker oil boosts risk appetite

Australian shares were set to rally for a third straight session on Tuesday, as falling oil prices eased inflation concerns and record Wall Street gains boosted risk appetite, lifting miners and banks.

The S&P/ASX 200 index rose 0.5% to 8,729.00 by 0017 GMT.

The benchmark closed 0.1% higher on Monday.

Oil prices tumbled nearly $2 overnight after increased crude exports from the Middle East and a pledge from Group of Seven nations to bolster supplies helped ease concerns about potential shortages, reducing fears of another energy-driven inflation shock.

The pullback in prices weighed on energy stocks, which fell 0.9%, with heavyweights Woodside Energy and Santos down 0.8% and 0.4% each.

In contrast, mining and banking stocks underpinned the broader market, tracking improved global risk appetite after the Nasdaq closed at a record high overnight.

Sentiment was also supported by expectations that the US Federal Reserve may keep interest rates unchanged at its upcoming meeting after last week’s softer-than-expected employment data reinforced evidence of a cooling labor market, tempering concerns that borrowing costs could remain higher for longer.

Back in Sydney, miners rose 0.8%, on track for their third consecutive session of gains, driven by higher copper prices.

BHP Group gained 0.4% while Rio Tinto was flat. Iron ore miner Rio will be reporting its third-quarter production next week.

Banks also gained 0.2%, with only NAB among the “Big Four” banks trading in the green.

Gold stocks were up 0.2%, real estate stocks and health stocks traded up 1.6% and 0.7%, respectively.

Bucking the trend, tech stocks fell 0.7%, on track for their worst session since September 25. Sector major WiseTech Global dropped 2.3% and was among the benchmark’s biggest laggards.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index rose 0.2% to 13,719.93.