Australia: Miners, banks propel shares to record high; RBA outlook in focus

AUSTRALIAN shares rose to a record peak on Wednesday, supported by strong performances among miners and banks, while investors almost fully priced in the likelihood of an interest rate cut by the Reserve Bank of Australia next week.

The S&P/ASX 200 index was up 0.6 per cent at 8,820.80 points, as of 0051 GMT. The benchmark crossed the psychologically key level of 8,800 for the first time.

Data from ANZ and employment website Indeed on Tuesday showed that job advertisements in Australia fell 1 per cent in July, while separate government figures indicated a modest rise in household spending in June.

The soft local data underscored market wagers for a rate cut, with swaps pricing in more than 99 per cent odds of a quarter-point reduction by the central bank on Aug 12.

Global risk appetite improved as odds of a US rate cut in September now stand at about 92 per cent, as per CME Fedwatch, up from 63 per cent seen on July 28.

On the local bourse, Australian miners propelled the benchmark index with a 1.1 per cent rise, while gold stocks gained 3.5 per cent on higher iron ore and bullion prices.

Banks advanced 0.8 per cent, with the “big four” banks rising between 0.3 per cent and 1.1 per cent.

Among individual companies, REA Group was among the top gainers as its shares rose nearly 10 per cent, their biggest intraday percentage gain in 2-1/2 years.

The News Corp-controlled Australian property listings firm reported higher annual profit and raised its dividend payout.

New Zealand’s benchmark S&P/NZX 50 index edged 0.2 per cent higher to 12,904.18 points.

The country’s jobless rate rose slightly in the second quarter as the labour market remained soft, matching the central bank’s forecast.

Markets have priced in an 85 per cent chance of a quarter-point rate cut by the Reserve Bank of New Zealand on Aug 20, with a potential second cut expected by early next year. REUTERS