Australian Stocks Climb on Miner and Bank Gains
The Australian stock market saw gains as miners and banks led the charge, following the Reserve Bank of Australia’s latest rate hike. The S&P/ASX 200 rose 0.5% to 8,725.70, even though the central bank raised the cash rate to a 15-year high and suggested further tightening if inflation remains elevated.
Recent inflation data has been mixed, with August seeing a slight acceleration due to fuel prices, but still below expectations. This has tempered some anticipation of an immediate follow-up hike, creating a market backdrop where rates may stay higher for longer but are near their peak.
Miners benefited from firmer commodity prices, while banks climbed as higher rates typically boost their profits by widening the gap between loan earnings and deposit costs. Tech stocks lagged, as elevated interest rates make future profits look less attractive.
The market’s split performance highlighted how rising rates impact different sectors. Financials like Westpac outperformed, while tech names such as WiseTech and Xero fell. This rotation could continue as investors weigh whether the central bank will hike again or pause in November.