Australian shares close higher as gold miners shine

St Barbara

29/11/2023 06:18

* 
      Gold stocks close at highest level since July 14
    

        * 
      Weaker-than-expected inflation tempers rate-hike fears
    

        * 
      RBNZ holds cash rate, but gives hawkish forecast
    

  
    By Aaditya GovindRao
       Nov 29 (Reuters) - Australian shares ended higher on
Wednesday, driven largely by gold stocks as bullion prices rose
on an extended decline in the U.S. dollar and Treasury yields,
while weaker-than-expected domestic inflation also aided risk
sentiment.
    The S&P/ASX 200 index  .AXJO  ended 0.25% higher at 7032.70
points. The benchmark closed 0.4% higher on Tuesday.
    Australian gold miners  .AXGD  gained nearly 5% to scale
their highest levels in more than four months. Miners tracked
bullion prices higher as traders assessed bets that the U.S.
Federal Reserve would cut rates by the first half next year.
 GOL/ 
    Top gold miners Northern Star Resources  NST.AX  and
Evolution Mining  EVN.AX  rose 4.4% and 5.4%, respectively.
    Arbitrage trading in gold - selling gold from the West to
the East - at a time of surging gold prices is exceptionally
good for Australia and its equity market, said Brad Smoling,
managing director at Smoling Stockbroking.
    Meanwhile, data showed inflation eased by more than expected
in October, suggesting the Reserve Bank of Australia (RBA) may
not need to hike interest rates at its next meeting on Dec. 5.
    "Today's data reduces the risk of an upside surprise to the
fourth-quarter inflation relative to the RBA's inflation
forecasts," analysts at country's top lender Commonwealth Bank
of Australia wrote.
    Analysts widely expect the RBA to hold its cash rate at the
current 12-year high level of 4.35%.
    Among other sectors, healthcare stocks  .AXHJ  added 1.8%,
while energy  .AXEJ  and banking  .AXEJ  lost 0.8% and 0.4%,
respectively.
    Across the Tasman Sea, the New Zealand benchmark S&P/NZX 50
index  .NZ50  edged lower to close at 11,235.94 points.
    The Reserve Bank of New Zealand (RBNZ) held its official
cash rate steady, but warned inflation remained too high and
that further policy tightening might be needed if price
pressures did not ease.
    The RBNZ also raised its forecast peak cash rate to 5.7%,
further heightening concerns of a rate hike. 
    

 (Reporting by Aaditya Govind Rao in Bengaluru; Editing by
Sherry Jacob-Phillips)
 ((Aaditya.govindrao@thomsonreuters.com))
 
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