Australian shares have closed higher on the back of rising commodity prices but investor sentiment remains cautious amid the ongoing Ukraine conflict and prospects for an earlier-than-expected interest rate increase to curb inflation.
The benchmark S&P/ASX200 index ended up 25 points, or 0.34 per cent, to 7479.0 on Wednesday.
The All Ordinaries index closed 36.5 points, or 0.47 per cent higher, at 7772.0.
“We’ve seen commodity prices push higher, which is why you’re seeing the most improvement in the mining and energy stocks. We have also seen financial stocks hold their ground,” CommSec market analyst Tom Piotrowski said.
Local investors had braced for a tame session after overnight data showed the biggest increase in US inflation in 16-and-a-half years, cementing the case for a 50-basis-points interest rate hike from the Federal Reserve next month.
That sentiment was underlined by the Reserve Bank of New Zealand (RBNZ) lifting interest rates by a more-than-expected 50 basis points on Wednesday, arguing that faster moves now would lessen the risk of higher inflation in the future.
“The perception is that the Reserve Bank of Australia would have to act more aggressively in the near to medium term, and the example set by the RBNZ creates a little more pressure on them,” Mr Piotrowski said.
The gains in the local market came mostly on the back of the heavyweight energy and mining sectors, while travel stocks also climbed as New Zealand reopened its borders to Australian travellers ahead of the Easter long weekend.
Oil and coal prices rebounded more than 6 per cent on the back of lockdowns easing in China and a decline in Russian oil and gas production that raised supply concerns.
Woodside Petroleum ended nearly flat while Santos, Ampol and Beach Energy rose more than 1.0 per cent each. Whitehaven Coal jumped 3.2 per cent to $4.54.
Oil explorer Viva Energy climbed two per cent after approving funding to upgrade processing capability at its Geelong Refinery.
The top iron ore miners again led the sector higher, with BHP up 0.2 per cent, Fortescue Metals up around 0.8 per cent and Rio Tinto shares rising two per cent.
Lithium and gold producers, including AVZ Minerals, Pilbara Minerals, Regis Resources and Northern Star joined the momentum, gaining between two per cent and 10 per cent.
Three of the Big Four banks traded in the green, with Commonwealth Bank the only one under pressure. But other key financial stocks including Macquarie Group, Perpetual and buy now pay later operator Zip Co. closed lower.
Shares of EML Payments soared 10.5 per cent to $2.94 after the payment solutions provider disclosed it had discussed a potential takeover by US private equity firm Bain Capital earlier this year, although discussions have now ended.
Shares of travel firms Webjet and Flight Centre were both up 2.5 per cent each amid a holday rush of travellers and as New Zealand opened its borders to Australian travellers for the first time since mid-2021.
Meanwhile, the Australian dollar was buying 74.34 US cents at 1700 AEST, slightly higher from its 74.28 US cents value at Tuesday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index ended up 25 points, or 0.34 per cent, to 7479.0 on Wednesday.
* The All Ordinaries index closed 36.5 points, or 0.47 per cent higher, at 7772.0.
* At 1700 AEST, the SPI200 futures index was unchanged at 7454 points.
One Australian dollar buys:
* 74.34 US cents, from 74.28 cents on Tuesday
* 93.77 Japanese yen, from 93.29 yen
* 68.68 Euro cents, from 68.44 cents
* 57.25 British pence, from 57.13 pence
* 109.36 NZ cents, from 108.81 cents.
(Australian Associated Press)