Australian Shares Extend Rally as Oil Prices Drop and Risk Appetite Improves

Australian shares are poised for a third consecutive day of gains on Tuesday, driven by weaker oil prices and strong Wall Street performance. The S&P/ASX 200 index climbed 0.5% to 8,729.00 by 0017 GMT, following a 0.1% increase on Monday. Oil prices dropped nearly $2 overnight due to increased Middle East exports and G7 pledges to boost supplies, easing inflation fears and reducing pressure on energy stocks, which fell 0.9%. Heavyweights Woodside Energy and Santos declined 0.8% and 0.4%, respectively.

Mining and banking stocks provided support, benefiting from improved global risk appetite after the Nasdaq hit a record high. Miners rose 0.8%, with BHP Group gaining 0.4% and Rio Tinto remaining flat. Banks edged up 0.2%, led by gains in NAB among the 'Big Four.' Gold stocks and real estate stocks also saw gains of 0.2% and 1.6%, while health stocks rose 0.7%. Tech stocks bucked the trend, falling 0.7%, with WiseTech Global dropping 2.3% and becoming one of the benchmark's biggest laggards.

Sentiment was further boosted by expectations that the US Federal Reserve may keep interest rates unchanged at its upcoming meeting, following softer-than-expected employment data. Across the Tasman Sea, New Zealand's S&P/NZX 50 index rose 0.2% to 13,719.93.