Australian shares advanced on Monday, boosted by mining and financial stocks, as investor optimism improved after data last week showed US inflation tracked sideways, boosting hopes of earlier-than-expected interest rate cuts this year.
The S&P/ASX 200 index rose 0.9% to 7,769.00 points by 0026 GMT.
The benchmark rose 1% on Friday. On Friday, the US Commerce Department said the personal consumption expenditures (PCE) price index, the Federal Reserve’s favoured inflation indicator, increased in line with expectations last month.
The data bolstered expectations of a rate cut as early as September this year.
Expectations for a September rate cut climbed to more than 55%, compared with 48.7% before the data, according to the CME FedWatch tool.
Back in Sydney, mining stocks were the biggest gainer on the benchmark index, rising 1.1%.
The sub-index was on track to record its best day since May 20.
Australian shares hit record high; RBA cautious on inflation
Sector majors BHP Group, Fortescue and Rio Tinto rose between 0.2% and 1.3%.
Rate-sensitive financial stocks also moved 0.9% higher, with the “Big Four” banks rising between 0.7% and 0.9%.
Energy stocks also advanced 1.1%, with sub-index giant Woodside Energy and smaller rival Santos rising 0.9% and 0.6% respectively.
Gold stocks, however, struggled for direction, rising as much as 0.3% in early trade before falling 0.2%. Sector majors Evolution Mining and Northern Star Resources moved up around 0.5%.
Bucking the trend, technology stocks fell 0.5%, tracking Wall Street indexes from Friday, as sub-index giants Xero and WiseTech Global dropped around 0.1% and 0.7% respectively.
Across the Tasman Sea, New Zealand’s markets were closed on account of a holiday on Monday.
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