SYDNEY: Australian shares rose for the first time this week on Friday, with miners leading a broad-based rebound, as an overnight pullback in oil prices encouraged investors to cautiously rebuild positions.
The S&P/ASX 200 index closed 0.7 percent higher at 8,729.80, marking its best session since April 8, but still lost 1.4 percent over the week after eight consecutive sessions in the red.
Oil prices eased overnight from a four-year peak on Thursday, while strong earnings from mega-cap technology companies lifted Wall Street.
Some buying interest in the ASX200 was expected after consecutive sessions of losses, William Taylor, COO and portfolio manager at etfshares, said, adding that the solid US corporate results buoyed global risk appetite.
However, Taylor cautioned against treating the benchmark’s current level as a firm floor, saying “today’s bounce looks more like a relief rally than a clear change in market direction”.
“The rally still needs to be tested, particularly with oil prices sensitive to US-Iran tensions, inflation risks elevated, and the RBA decision still ahead.”
Miners led gains, rising 2.1 percent, with Rio Tinto and BHP each up over 2 percent after iron ore prices firmed on improved Chinese factory activity. Although the sector is still down 3.2 percent for the week. Financials fell 0.3 percent, with a 2.8 percent drop in ANZ weighing the sector down.
The bank flagged an increase in provisions to cover potential loan loss stemming from the Middle East conflict, while also reporting a 6 percent rise in half-year cash earnings.
Meanwhile, major grocer Coles rose 3.7 percent after reporting higher quarterly sales, which took the consumer staples index 1.1 percent higher.
The focus next week will be on the central bank’s monetary policy decision on Tuesday, where a quarter-point rise in the cash rate is about 83 percent priced in by markets.
A hike delivered with a measured message could comfort investors, but messaging that stresses concerns about inflation could put renewed pressure on equities, Taylor said.
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