Australian shares closed higher for a third straight session on Thursday, as sentiment remained upbeat after the US Federal Reserve signalled a potential slowdown in the pace of future interest rate hikes.
The S&P/ASX 200 index ended 0.3% higher at 7,252.6 points.
The minutes from the Fed’s November meeting indicated that a majority of policymakers advised a slower pace of monetary policy tightening, with Fed fund futures now pricing-in an 85% chance of 50-basis point (bps) increase in the December meeting.
It’s very telling that Fed can be less aggressive, said Brad Smoling, managing director at Smoling Stockbroking.
“I think if the Reserve Bank of Australia (RBA) is going to hike rates, its going to be 25 bps, if some of the economic data shows that they have done enough,” Smoling said.
“I don’t anticipate any surprises to the upside of raising rates, if anything I anticipate they’ll do something very small or even better, pausing in the short term,” he added.
Aiding sentiment further, major Chinese banks agreed to provide fundraising support to the embattled property sector, indicating a possible revamp in demand for the steel-making commodity.
Australian shares hit 5-month high on mining, energy gains
That lifted the export-reliant miners and mining sub-index by 1%, with iron ore futures rising after a three-day slump.
Sector giants BHP Group, Rio Tinto climbed 1.6% and 1.4%, respectively.
Gold stocks too soared over 2.5%, hitting their highest level in about five months, on firmer gold prices.
Domestic technology stocks tracked overseas peers, cheering Fed’s likely slower interest hike pace.
Energy stocks were the only outliers, dipping 1.8% on lower oil prices as fears of supply disruptions eased on considerations a high price cap on Russian oil.
Oil majors Santos Ltd and Woodside Energy fell 1.2% each, respectively.
New Zealand’s benchmark S&P/NZX 50 index fell 0.02% to 11,321.71 points.
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