Australian shares gain on rate-cut bets, banks hit near record high

Reuters
01-29
Australian shares gain on rate-cut bets, banks hit near record high

Updates to close

By Nichiket Sunil

Jan 29 (Reuters) - Australian shares closed higher on Wednesday as a surprisingly soft inflation report raised bets of a near-term interest rate cut, with financial, gold, and energy stocks leading the gains.

The S&P/ASX 200 index .AXJO rose 0.6% to 8,447.0, after closing slightly lower in the previous session.

Australia's annual trimmed mean gauge of consumer prices rose 3.2% in the December quarter, according to data released by the Australian Bureau of Statistics. This compared with an expected 3.3% gain.

Investors have raised their bets for a rate cut in February, with swaps now implying a 75.8% chance of a quarter-point easing, higher than the previous day's 66%. 0#AUDIRPR

Financials .AXFJ rose to a near record high and led gains on the benchmark index. The sector closed 0.3% higher, as banks gained on increased expectations of a rate cut. Westpac WBC.AX and ANZ ANZ.AX added 0.5% and 0.3%, respectively.

"Banks stand to benefit from the increase in consumption and overall economic activities that a rate cut paves the way for, while boosting lending activities," said Junvum Kim, Asia Pacific senior sales trader with Saxo Markets.

Energy .AXEJ and gold .AXGD stocks gained 0.6% and 2%, respectively, as underlying commodity prices steadied after a fall in the previous session. O/R GOL/

Oil and gas producer Woodside Energy WDS.AX added 0.8%, while gold-focused Evolution mining NST.AX gained 1.6%.

Among individual stocks, Star Entertainment SGR.AX gained 13.4% after the cash-strapped casino operator said it would divest its Sydney event centre for A$60 million ($37.42 million) to access liquidity.

Miners .AXMM ended 0.1% lower. BHP BHP.AX and Rio Tinto RIO.AX dropped 0.9% and 1.2%, respectively, pressured by weak copper prices.

London copper hovered near a three-week low as U.S. President Donald Trump's threat to levy tariffs on copper imports kept the market under pressure. MET/L

New Zealand's benchmark S&P/NZX 50 index .NZ50 closed 0.4% higher at 13,003.04.

($1 = 1.6036 Australian dollars)

(Reporting by Nichiket Sunil in Bengaluru; Editing by Subhranshu Sahu)

((Nichiket.Sunil@thomsonreuters.com;))

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