Australian shares hit over 7-week high as banks, energy stocks gain; Coles tumbles

Australian shares hit a more than seven-week high on Friday as banks and energy stocks advanced, while supermarket operator Coles fell over 10% and headed for its worst session ever after missing quarterly revenue estimates by a narrow margin.

The S&P/ASX 200 index rose 1.1% to 8,992.60 by 0017 GMT, hitting its highest since September 8.

The benchmark was up more than 2% for the month, putting it on track for its strongest monthly performance in three months.

Investors were awaiting the Reserve Bank of Australia’s (RBA) November 3 policy decision after the US Federal Reserve and the European Central Bank left interest rates unchanged earlier this week.

Swaps now imply a roughly 43% chance of a fifth rate hike next week and more than an 80% probability of a hawkish outcome at the RBA’s December meeting.

Coles, Australia’s second-largest grocer, fell more than 10% after posting first-quarter revenue slightly below analysts’ estimates, putting the stock on course for its steepest one-day decline on record.

The drop weighed on the consumer staples index, which fell as much as 4% and headed for its weakest session since late April.

Financials rose 1.3% to a near three-month high ahead of earnings next week.

The “Big Four” banks advanced between 0.9% and 1.2%.

The sector was on track for its best month since February. Energy stocks gained as much as 2.2% as oil prices remained above $100 per barrel.

Santos, Woodside Energy and Origin Energy advanced between 1 and 1.9%. Miners slid 0.3%, tracking a dip in copper prices, but were set for their first weekly gain in nine weeks.

New Zealand’s benchmark S&P/NZX 50 index rose 0.3% to 13,752.85, on track for its best session in more than a week.

Reserve Bank of New Zealand Monetary Policy Committee member Karen Silk said a hawkish move in December would be justified if inflationary pressures continued.