Australian shares closed higher on Monday, led by gains in heavyweight mining stocks, even as investors remained cautious ahead of the central bank’s monetary policy meeting where it is expected to raise interest rates by 25 basis points.
The S&P/ASX 200 index advanced 0.6% to 7,246.1 points. The benchmark ended 0.1% higher on Friday, logging a 2.3% increase in the first half of the year.
Investors are awaiting the Reserve Bank of Australia’s (RBA) policy meeting on Tuesday to assess the trajectory of interest rates. May inflation has eased to 5.6% from 6.8% in April, but well above the RBA’s 2-3% target range.
Consumer and property stocks drag Australian shares lower
A Reuters poll of economists found that the RBA will likely raise its interest rate by 25 basis points to 4.35%. Since a surprise pause in April and subsequent hikes over the next two months, economists are divided over the RBA’s next move.
“We know that the June decision by the RBA to hike was a line-ball decision, and it will be another close call this week,” said Tim Waterer, chief market analyst at KCM Trade.
“If the RBA does hike this week, it could dent the momentum of equities in terms of the impact on the growth outlook.”
Heavyweight mining index gained 1.2% to hit its highest since June 21. Sector majors BHP Group Ltd and Rio Tinto Ltd rose 0.6% and 0.7%, respectively.
Gold stocks advanced 3.0%, with Newcrest Mining and Northern Star Resources rising 2.5% and 3.6%, respectively.
Financial stocks added 0.4%, while energy shares rose 0.8%.
Meanwhile, United Malt Group Ltd jumped 8.6%, topping the gains on the benchmark index after agreeing to a A$1.5 billion ($999 million) takeover offer from Malteries Soufflet, a branch of French agribusiness InVivo.
New Zealand’s benchmark S&P/NZX 50 index closed flat at 11,916.87 points.
Comments
Comments are closed for this article.