Australia shares mark best day in a month as banks, miners rebound

SYDNEY: Australian shares rose on Wednesday by their most in a month as investors were relieved that the central bank would not hike interest rates anytime soon, with heavyweight financials and miners driving the rebound.

The S&P/ASX 200 index climbed 0.9% to 7,392.7, with most sectors closing in positive territory.

The index had fallen 0.6% in volatile trade on Tuesday after the Reserve Bank of Australia (RBA) dropped an ultra-low target for bond yields and opened the door for an earlier interest rate hike.

However, RBA Governor Philip Lowe insisted after market hours on Tuesday that the decision did not reflect that the central bank would raise rates before 2024.

Financials, the largest constituent of the ASX 200, led gains on the benchmark, advancing 1.2% in their best session in nearly a month.

Shares of Commonwealth Bank of Australia rose to their highest close since Aug. 11 after the country’s largest lender said it would offer retail clients crypto services.

Asian shares were broadly in a wait-and-see mode ahead of the U.S. Federal Reserve’s expected announcement on tapering the pandemic-era monetary stimulus later in the day.

“I suspect the market is going to be quite volatile over the next couple of days, depending on how the data points play out,” said Mathan Somasundaram, chief executive officer of Deep Data Analytics.

Miners jumped 1.3% despite weaker iron ore and copper prices, with BHP Group and Rio Tinto up 1.1% and 1.2%, respectively.

Energy stocks shrugged off weaker crude oil prices to rise 0.6%, with Whitehaven Coal being the top gainer with a jump of 3.8%.

New Zealand stocks were largely flat after the central bank warned that rising inflation could mean higher interest rates.