Australian shares snapped a seven-session losing streak to close higher on Tuesday, underpinned by financials and energy stocks, as investors pushed back fears of recession after the central bank hinted at a less-aggressive policy tightening approach.
The S&P/ASX 200 index closed 1.41% higher at 6,523.80, after marking their longest losing streak since March 2020 on Monday.
Reserve Bank of Australia Governor Philip Lowe played down the chance of rates being increased by a super-sized 75 basis points and took issue with market pricing of rates reaching as high as 4% by year-end.
“We caution that the global experience suggests all options are on the table,” analysts at RBC Capital Markets said in a note. Financials, which closed 2.7% higher, were among the top gainers in the main index.
The “Big Four” banks gained between 2.4% and 3.8%. Energy stocks jumped 2.8% on strong oil prices as investor focus moved to tight supplies of crude and fuel products rather than concerns over a recession dampening demand.
Australian shares flat as energy stocks offset gains in banks
Heavyweights Woodside Energy Group and Santos advanced 3.3% and 1.2%, respectively. “It looks like we’ll see a “sympathy bounce” for risk assets today,” said Matt Simpson, market analyst, City Index.
Global miner BHP, which operates metallurgical coal mines in Queensland, jumped 1.7% after the Australian state said it would raise royalties on coal production to about A$1.2 billion ($834.60 million) in the 2023 financial year to capture windfall profits.
Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index closed 1.07% higher at 10,701.59.
Comments
Comments are closed for this article.