Australian shares jumped 1% on Monday, with miners leading gains on stronger iron ore prices, while traders awaited a key cash rate decision from the country’s central bank.
The S&P/ASX 200 index ended 1% higher at 7,216.30, after shedding 0.1% last week.
The Reserve Bank of Australia (RBA) is likely to keep its key interest rate unchanged at 3.85% on Tuesday, even as inflation remains well above the target range, according to a Reuters poll of economists.
“While markets are leaning towards a hold from the RBA after a higher-than-expected inflation in May brought an upside surprise, flat retail sales and an uptick in the unemployment rate are also showing the Australian economy is slowing down,” said Glenn Yin, head of research and analysis at AETOS Capital Group.
Australian shares also tracked the optimism in global markets after a mixed US jobs report on Friday bolstered expectations that the Federal Reserve would pause rate hikes this month.
Local miners followed iron ore prices higher to jump 1.4%, their third consecutive session of gains. “I think the ASX is really enjoying the rising iron ore prices today with the materials sector leading the index higher,” said Yin.
Gold, mining stocks lift Australian shares ahead of RBA decision
Index majors Rio Tinto, BHP Group and Fortescue Metals Group added between 1.3% and 3.6%. Financials advanced 1% with the “big four” banks climbing between 0.6% and 1.5%.
Separately, shares of AGL Energy ended flat after it was served with a class action lawsuit alleging that it breached competition and consumer law during bidding in the South Australian region of the National Electricity Market.
Bourse operator ASX Ltd’s shares were up 0.1%.
The operator has submitted a special report for its Clearing House Electronic Subregister System software to the country’s corporate regulator and the RBA, outlining details about its arrangement to support and maintain its trading system.
New Zealand’s benchmark S&P/NZX 50 index fell 0.3% to end at 11,880.90.
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