Australian shares closed higher on Monday as heavyweight mining stocks rallied on hopes of an easing in China’s COVID-19 curbs, with a likely quarter-point hike by the domestic central bank later in the week keeping investors cautious.
The S&P/ASX 200 index ended 0.3% higher at 7,325.60 points.
The Reserve Bank of Australia (RBA) will go for another modest 25 basis-point rate hike on Tuesday, taking the key lending rate to 3.10% — its third quarter-point hike in a row after a succession of half-point moves, a Reuters poll showed.
Damian Rooney, director of equity sales in Argonaut Private Equity, agreed with the poll over the quantum of the hike, and said the dovish tone struck by the US Federal Reserve is good news for equities going into December.
Aiding the sentiment further, China — Australia’s top trading partner — announced steps to ease stringent COVID-19 lockdowns, boosting global growth and commodity demand outlook and resulting in a surge in base metals and gold prices. Miners were the top boosts to the benchmark, with the sub-index up 1.6%.
Iron ore giants Rio Tinto, BHP Group and Fortescue Metals were up between 2.7% and 8%.
The energy sector surged 1.5% as oil prices climbed overnight.
Sector majors Woodside Energy and Santos Ltd added 2% and 2.7%, respectively.
Australian shares end lower on mounting fears of global slowdown
Battery minerals producer IGO Ltd declined as much as 5% after it suspended production at its Nova nickel operation in Western Australia for around four weeks after a fire damaged its power station over the weekend.
Financials declined slightly, with all of the “Big Four” banks seeing a decline. National Australia Bank and Australia and New Zealand Banking Group lost 0.4% and 0.3%, respectively.
In New Zealand, benchmark S&P/NZX 50 index rose 0.3% to 11,677.75 points, hitting its highest since Sept. 15.
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