Australian shares staged their strongest session since early August after softer-than-feared inflation figures eased immediate concerns about further interest rate rises. The S&P/ASX 200 gained 80 points, or 0.92 per cent, to 8798.3, while the All Ordinaries rose 0.93 per cent to 8969.2.
The rebound followed Tuesday’s hawkish rate decision from the Reserve Bank of Australia, with investors given some relief by the latest inflation data. Hebe Chen, senior market analyst at Vantage, said the market had turned “a shaky morning start into a solid rebound”.
Consumer retail stocks rose more than 2.6 per cent and real estate shares climbed 3.6 per cent, leading gains across all 11 sectors. Both areas have recently been weighed down by borrowing costs and weaker market sentiment.
Ms Chen said the rally reduced some immediate pressure but did not remove broader risks. Oil prices and bond yields remained concerns, with longer-term yields still elevated despite a retreat in shorter-term yields.
“While crude prices have cooled and front-end yields have retreated, long-end bond yields remain stubbornly elevated – a clear signal that the broader ‘higher-for-longer’ [interest rate] baseline is still firmly intact,” she said.
The late advance was not enough to prevent the ASX 200 from recording a fall of more than 3 per cent in September, its first negative calendar month since March.
Energy and mining stocks advance
Energy stocks gained 1.6 per cent as coal miners and Viva Energy performed strongly. Crude prices edged higher during the session, with no sign of progress towards ending the Middle East war and the associated energy crisis.
The materials sector rose 0.7 per cent. Rio Tinto gained 1.6 per cent to $166.93, outperforming the other major miners, while BHP edged higher to $60.82.
Gold producers delivered mixed results as the precious metal held at about US$4,180 an ounce. Northern Star rose more than 6 per cent following reports that South Africa’s Gold Fields was considering an improved takeover offer for the company.
Communications stocks gained almost 2 per cent, helped by a rise in REA Group and a nearly 4 per cent increase in Seek. The major banks were more subdued, with the financials sector up 0.3 per cent.
Commonwealth Bank was the best performer among the big four, rising 0.5 per cent to $151.01. The bank said it would increase variable home loan rates by 0.25 percentage points from October 9, matching Tuesday’s RBA decision.
Lendlease shares jumped by more than 10 per cent after the company met the conditions needed to sell its remaining stake in the Keyton Retirement Living Trust to Aware Super. Boss Energy rose by a similar amount after former Oil Search managing director Peter Botten began as its chairman.
The Australian dollar was buying 69.71 US cents, down from 69.93 US cents at 5pm on Tuesday.
Wall Street slips as Treasury yields rise
US shares moved lower as rising long-term Treasury yields put pressure on markets. The S&P 500 fell 0.2 per cent, the Dow Jones Industrial Average lost 0.3 per cent and the Nasdaq composite slipped 0.1 per cent.
The main indexes weakened after a quiet start, limiting gains from several large technology companies. Nvidia fell 0.2 per cent after surrendering an early advance, while Broadcom was up about 2 per cent.
US stocks have faced pressure as oil prices have swung sharply amid the conflict between the United States and Iran. The yield on the 10-year Treasury rose to 5.25 per cent, its highest level in 24 years.
Mediators continued efforts to secure an agreement between Washington and Tehran to end the fighting and reopen the Strait of Hormuz. US President Donald Trump rejected an offer from Tehran to reopen the key waterway over the weekend.
Several economic updates due in the US this week are expected to provide investors and the Federal Reserve with further indications of the direction of inflation and the effect of high prices on households and businesses.
