Australian shares rise over 1% on US interest rate cut hopes – Markets ReadingS


Australian shares rose more than 1% on Friday on hopes the US Federal Reserve may stop raising interest rates, while investors braced for the Reserve Bank of Australia’s (RBA) policy meeting next week for further direction.

The S&P/ASX 200 index rose 1.1% to 6,980.30 by 1116 GMT, driven by gains in heavyweight mining and financial shares.

The benchmark index has gained 2.3% for the week so far, on track for its best week since September 1.

The Fed left interest rates unchanged on Wednesday as expected, and Fed Chairman Jerome Powell acknowledged that central bank officials are willing to raise interest rates again if the country’s inflation stalls.

However, market participants are optimistic that interest rates have peaked and the Fed will not raise interest rates again.

The RBA is likely to raise interest rates on November 9, after keeping interest rates steady for the past four months, as recent strong inflation and other economic data add to its woes.

“The interest rate market predicts that the 50% probability of a 25 basis point rate hike by the RBA on Tuesday will increase to 4.35%. “This means there could be disappointment in the equity market if the RBA hikes,” the IG analyst said in a note.

Interest rate-sensitive financials rose more than 1%, while the “big four” banks rose more than 1% each. Financials were on track for their best week since September 15.

Miners gained 0.6%, while BHP Group and Rio Tinto gained 0.7% and 0.1% respectively. Technology stocks rose 1.5% to their highest level since October 19. It was on track to have its best week since July 14, with an increase of 4.6% on the week.

Banks and mining stocks lift Australian stocks after Fed keeps interest rate steady

Among individual stocks, Macquarie Group fell as much as 3.2 per cent after the financial group reported its lowest half-year profit in three years.

New Zealand’s benchmark S&P/NZX 50 index rose 0.8% to 11,128.47.

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