Australian Shares Rise as RBA Warns Inflation Risks Materialising
Australian shares rose on Friday as mining stocks benefited from stronger commodity prices. The Reserve Bank of Australia's Governor Michele Bullock warned that inflation risks were materialising, citing the Middle East conflict and AI boom as contributing factors.
The S&P/ASX 200 index increased by 0.3% to 8760.6 points, extending gains for a third session. It was on track for its best week in three with a rise of around 0.2%. The Reserve Bank of Australia had already lifted borrowing costs by 75 basis points this year.
The RBA's next meeting is scheduled for September 29, with markets implying a 92% chance that the cash rate will be increased by 25 basis points. UBS expects two more 25 basis point hikes in November and September. The Reserve Bank of Australia's Governor Michele Bullock stated that inflation risks were materialising.
The mining sector was among the biggest gainers, with iron ore and copper prices rising on Chinese pre-holiday restocking. BHP and Rio Tinto each rose about 0.8%. Gold miners also strengthened, with Evolution Mining increasing by 2.8% and Northern Star Resources adding 2.2%. Technology stocks were up 0.6%, with Megaport rising around 2.1% and Codan adding 2.7%