Australian shares end at one-week high as miners, energy stocks gain

Australian shares rose marginally on Wednesday, with gains in miners managing to overcome investor caution after the central bank’s warnings on inflation clouded the monetary policy outlook.

The S&P/ASX 200 index rose 0.3% to log its highest close in a week at 8,640.6 points after struggling for direction early in the session.

Sentiment remained fragile a day after the Reserve Bank of Australia raised the cash rate to a 10-month high of 4.1%.

Kyle Rodda, senior financial market analyst at Capital.com, said he remained cautious on the outlook for the ASX 200, warning that further rate hikes could weigh on domestic fundamentals and valuations, while a prolonged global slowdown would make it difficult for the index to revisit record highs.

While investors pared back expectations of an immediate follow-up move in May, the RBA’s inflation warning was sharpened by the escalating Middle East war, which risked lifting fuel costs and further muddying the outlook for policy.

Markets now imply a roughly 50-50 chance of another RBA rate hike at its next meeting, with a cash rate of 4.35% fully priced by August.

Investor focus will now shift to a run of inflation-sensitive data ahead of the RBA’s May meeting, starting with monthly employment figures due on Thursday.

Miners rose for a second session, gaining 0.3%. BHP gained 0.7% after appointing Brandon Craig as its top boss, while Rio Tinto added 0.8%.

Energy stocks climbed 0.7% as oil prices rallied overnight, though Woodside Energy added 0.1% after naming interim chief Liz Westcott as permanent chief executive officer.

Banks ended 0.1% higher, while technology and real estate stocks rose 1.6% and 0.9%, respectively. Gold stocks ended flat as bullion prices eased ahead of the U.S. Federal Reserve decision.

New Zealand’s benchmark S&P/NZX 50 index fell 1% to 13,315.6 points.