Australian shares ended higher on Thursday as mining stocks got a boost from record-high copper prices, outweighing losses in property and consumer stocks driven by firmer bets of an interest rate hike after the latest economic data.
The S&P/ASX 200 index added 0.3% to close at 8,618.40 points. The benchmark added 0.2% on Wednesday.
Miners rose 0.8%, closing at a record level for a third session. The sub-index is up more than 32% so far this year, outpacing a 5.6% gain in the benchmark index.
Shanghai copper hit a record high on Thursday, boosted by a sharp rise in London Metal Exchange warrant cancellations that signalled tightening supply outside the U.S., along with increasing bets of a Federal Reserve rate cut next week.
The benchmark three-month LME copper scaled a record peak on Wednesday.
“This strength (in miners) is overwhelmingly a commodity story, led by copper,” said Marc Jocum, Senior Product and Investment Strategist at Global X ETFs.
“More broadly, investors are leaning into commodities as a hedge in an environment where inflation risks remain elevated and supply constraints persist,” Jocum added.
BHP Group jumped 3.6% and Rio Tinto climbed 3.9%.
Financials added 0.6%, with the ‘Big Four’ banks rising between 0.2% and 1.7%.
Real estate stocks were the biggest drag on the index, declining 2.1%.
The sector is bearing the brunt of the latest repricing of the next move in interest rates being a hike rather than a cut, Jocum said, adding that rate-sensitive sectors like REITs are hit hardest as major banks lift term-deposit rates.
Data showed Australian household spending in October surged at its highest rate in two years. This follows reports showing resilient GDP growth, surging employment and hot inflation – all suggesting the next move in interest rates could be up rather than down.
Investors have priced in a 50% chance of a rise in rates as soon as May.
New Zealand’s benchmark S&P/NZX 50 index ended 0.5% higher at 13,515.62 points.