Australian shares ended higher on Thursday, led by the gains in banks and miners after data showed the country’s trade surplus unexpectedly widened on lower imports, while investors brace for US inflation data.
The S&P/ASX 200 index rose 1.2% to close at 7,280.4, after hitting a five-week high earlier in the session. Local data highlighted how Australia continued to benefit from being a net exporter of resources when commodity prices were still relatively high.
Miners, up 1.5%, led gains on the benchmark index buoyed by robust iron ore prices, after China’s pivot from its stringent COVID-19 measures raised prospects of higher commodities demand.
Given the strong rebounds in iron ore prices, one can expect a solid quarter ahead for Australian miners, said Jessica Amir, a strategist at Saxo Capital Markets.
Up trends in industrial metals will probably continue for 2023 and that should bode well for commodity prices and related companies, she added.
Sector majors BHP Ltd, Rio Tinto and Fortescue Metals rose between 1.8% to 2.8%.
Financials also advanced 1.5%, with the “big four” banks gaining between 0.8% and 2.5%.
Commodity stocks lift Australian shares ahead of key inflation data
Commenting on the gains from Australian lenders, Amir said that with the upbeat economic data, there is a possibility that the Reserve Bank of Australia could raise interest rates, which are currently supporting the gains in banking stocks.
Investors will keenly watch the US inflation report due later in the day that could give the Federal Reserve room to dial back on its aggressive interest rate hikes.
Energy stocks climbed 1.3%, after oil prices rose as China’s demand outlook improved amid rising concerns over the impact of sanctions on Russian supply.
Sector major Woodside energy and Santos gained 2.1% and 1%.
Meanwhile, New Zealand’s benchmark S&P/NZX 50 index rose 0.2% to close at 11,664.880.
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