Australian shares rallied on Wednesday, aided by mining companies, but gains in energy stocks fell as investors waited for a series of central bank policy decisions, including those of the US Federal Reserve, later in the day. has been restricted.
The S&P/ASX 200 index.AXJO rose 0.3% to close at 7,501.7 after hitting its highest level since April 22 at the start of the session. The benchmark, which closed 0.1% lower on Tuesday, posted its best January performance since the index’s inception in April 2000.
Investors are eagerly awaiting the Fed’s decision. The decision is expected to be raised by 25 basis points (bp) to give some indication of the end of the tightening cycle. This could also set the tone for next week’s Reserve Bank of Australia (RBA) policy meeting.
Australia’s inflation rate is comfortably above 7% and on the rise, according to senior market analyst Matt Simpson of City Index. “Inflation has not yet crested in Australia, and I expect the RBA will eventually have to increase above 4%,” Simpson said.
Mining shares.AXMM rose 0.7% after data from China, the top iron ore consumer, showed a slowdown in factory activity in January.
eToro market analyst Josh Gilbert said China’s PMI data “is certainly helping miners… show improvements in new orders for manufacturing, construction, and services.”
Mining divisions BHP Group BHP.AX, Rio Tinto RIO.AX and Fortescue Metals Group FMG.AX rose from 0.3% to 1%. However, the.AXEJ Energy Index fell 1.2%, its fifth straight decline, while Santos STO.AX and Woodside Petroleum WDS.AX fell 1% and 1.4% respectively.
Financial stocks.AXFJ was flat while lender ANZ Group ANZ.AX rose 0.8%. Westpac Bank WBC.AX fell 0.5%. Technology stock.AXIJ closed 0.4 percent lower, after top loser Megaport Ltd MP1.AX continued its decline after falling below analyst expectations on Tuesday.
stocks of gold. With bullion prices trading in a constrained range, AXGD fell 0.4%. The benchmark S&P/NZX 50 index for New Zealand gained 1% to close at 12,090.93.