Australian shares were set to extend their wins into a third successive day on Thursday, buoyed by rising expectations of another rate cut in July after soft economic growth, though gains were capped by a retreat in the biggest bank.
The S&P/ASX 200 index gained 0.3% to 8,566.2 points by 0030 GMT.
It was about 48 points shy of the record high touched in February.
The benchmark closed 0.8% higher on Wednesday.
Markets ramped up bets on further monetary easing after data released on Wednesday showed the economy had a subdued start to the year, bolstering the case for the Reserve Bank of Australia (RBA) to act again.
Interest rate swaps now reflect an 82% chance of a July cut, up from 77% before the figures were released.
The RBA last trimmed rates by 25 basis points on May 20. Miners led sectoral gains as iron ore prices rebounded overnight, driven by short-covering and profit-taking.
Rio Tinto and Fortescue Metals rose 0.5% and 1.4% respectively.
Tech shares followed closely, mirroring gains on the tech-heavy Nasdaq Composite overnight. Logistics software firm WiseTech Global climbed 1.5%, while data centre operator NEXTDC advanced 2.1%.
Real estate investment trusts rallied to their highest level since late February, as the prospect of lower interest rates revived appetite for yield-sensitive property stocks.
Australia shares close higher after weak growth data bolsters rate cut hopes
Goodman Group and Dexus were up 1.2% and 0.4% respectively. Other defensive sectors, including consumer staples and healthcare, posted modest gains — in the range of 0.2% to 0.4%.
In contrast, energy stocks underperformed as oil prices slid more than 1% following an unexpected jump in US gasoline and distillate inventories. Santos declined 0.5%.
Financials traded in a narrow range, with Commonwealth Bank of Australia easing from a record high reached on Wednesday.
The rest of the “Big Four” lenders saw mixed performance.
Across the Tasman, New Zealand’s benchmark S&P/NZX 50 index edged up 0.3% to 12,533 points.