Australia shares close higher after US CPI, domestic job data
13/06/2024 07:46
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Australian shares snap 2 session losing streak
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Financials up 0.4%
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Sigma Healthcare shares down as much as 10.8%
(Updates to close)
June 13 (Reuters) - Australian shares closed higher on
Thursday supported by banking and healthcare stocks, as
investors digested a benign U.S. inflation print and a
faster-than-expected growth in domestic employment ahead of the
local central bank meeting next week.
The S&P/ASX 200 index .AXJO rose 0.4% to 77,49.7 points,
snapping a two-session losing streak.
Australian job data for May is unlikely to move the needle
much on rate cuts, with markets expecting the easing cycle to
start only in the second quarter of next year.
Employment for May exceeded expectations, with the jobless
rate also dipping, indicating that the labour market remained
resilient. However, the report is not expected to influence the
central bank's policy on interest rates.
Meanwhile, across the Pacific the Fed left its rates
unchanged and also stuck to its forecast for just one rate cut
in 2024, despite cooling inflation, watering down hopes for a
faster easing in rate policy around the globe. MKTS/GLOB
However, local analysts are of opinion that the Reserve Bank
of Australia's (RBA) decision on its interest rate cycle at its
two-day monetary policy meeting next week is unlikely to change
to an earlier rate cut after the data.
"I don’t believe the RBA will move in either direction
before the Fed eventually moves," Brad Smoling, managing
director at Smoling Stockbroking.
"RBA did not raise rates like most developed nations and has
much lower unemployment rate and much higher inflation rate. RBA
will struggle to justify a rate cut in the short term. We expect
them to remain on hold for a while yet," Mathan Somasundaram
Founder and CEO at Deep Data Analytics said.
In Sydney, rate-sensitive financial stocks .AXFJ closed
0.4% higher, with three of the "Big Four" banks gaining between
0.5% and 1%. Bucking the trend, ANZ Group ANZ.AX ended the
day's trade down 0.1%.
The healthcare sub-index .AXHJ advanced 1.6% while
Real-estate stocks .AXRE were also up 1.2%.
Energy stocks .AXEJ reversed their trajectory to close
0.6% lower before gaining as much as 1.2% in day's trade.
Miners .AXMM were also down 0.6%.
In company news, Sigma Healthcare's SIG.AX proposed merger
with Chemist Warehouse Group to form an A$8.8 billion entity
came under regulatory scrutiny over competition concerns,
sending the firm's shares down as much as 10.8% to its lowest
since late February.
New Zealand's S&P/NZX 50 index .NZ50 snapped a
five-session losing streak to close 1.1% higher at
11,872.64points.
(Reporting by Prerna Bedi in Bengaluru)
((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))
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