Banks, healthcare stocks lift Australian shares after job data fuels rate cut bets

Australian shares rose on Friday, led by heavyweight banks and healthcare firms, as soft domestic labour data raised expectations for another interest rate cut this year.

The S&P/ASX 200 index advanced 0.5% to 8,787.40, as of 0052 GMT. The benchmark index, however, was headed for its third consecutive weekly loss, down 0.9% this week.

An unexpected decline in August employment data on Thursday signalled labour market weakness, bolstering the case for an interest rate cut by the Reserve Bank of Australia later this year.

Most analysts now anticipate the RBA to maintain rates at September’s meeting, with a potential reduction priced for November, with October’s third-quarter inflation data helping shape the central bank’s monetary policy stance.

Rate-sensitive financials advanced 0.4%, with toplender Commonwealth Bank of Australia rising 1.1%.However, the subindex is down 1.2% for the week, set for its weakest weekly performance in two months.

Healthcare firms rose 2% and were poised for their best day in nearly two months.

Telix Pharmaceuticals jumped as much as 9.7%,leading gains on the healthcare sub-index and the benchmark index, after brokerage Citi started coverage on the stock with a“Buy“ rating. Biotech heavyweight CSL climbed as much as 2.5%.

Tech stocks rose as much as 2.7% to hit a record high after Wall Street indices notched record-high closes overnight. The sub-index is headed for its second consecutive weekly gain, advancing 1.8% so far.

Index majors Xero and Life360 advanced asmuch as 3.6% and 4.3%, respectively.

Real estate and energy stocks gained 0.5% and 0.6%, respectively.

Meanwhile, New Zealand’s benchmark S&P/NZX 50 index rose 0.7% to 13,210.01. Markets are pricing in a 31 basis pointsof rate cuts in October after Thursday’s data showed theeconomy contracted 0.9% in the June quarter, surpassing analysts’ forecast of a 0.3% decline.