Australian Shares Reach Near Two-Month High Amid Inflation Data Anticipation

Australian equities experienced further gains on Wednesday, achieving a level not seen in nearly two months. The financial sector spearheaded these advances as investors keenly awaited domestic inflation figures for insights into the Reserve Bank of Australia’s (RBA) future interest rate decisions.

The S&P/ASX 200 index increased by 0.3%, marking its fifth consecutive session of growth, to reach 8,094.8 points by 0052 GMT. This is the highest point for the index since March 6.

On the preceding day, Tuesday, the benchmark index had already risen by 0.9%.

Inflation Data and RBA Expectations

The first-quarter inflation data, scheduled for release later in the day, is expected to reveal that the trimmed mean, a crucial measure of core inflation, has risen by 0.6%. This increase is projected to reduce the annual rate from 3.2% to 2.8%.

Such a development could potentially encourage the RBA to consider lowering its interest rate at the upcoming meeting on May 19.

According to the RBA rate tracker, a survey conducted as of April 29 indicated that 62% of market participants anticipate the RBA to reduce rates from the existing 4.10% to 3.60%.

Sector Performance

Financial stocks, which are sensitive to interest rate changes, were the primary drivers of growth, increasing by 0.5% and extending their gains for the tenth consecutive session.

The “Big Four” banks all saw increases ranging from 0.3% to 0.8%.

Technology stocks also performed well, rising by 0.8%, mirroring overnight gains on Wall Street.

Conversely, energy stocks declined by 0.4%, influenced by a decrease in oil prices. This drop in oil prices was attributed to concerns regarding potential weakening of global economic growth and fuel demand, stemming from US President Donald Trump’s unpredictable tariff policies.

Individual Stock Movements

Origin Energy, a prominent power producer in Australia, experienced a 2.3% decrease following its report of a 10% sequential decline in revenue for the third quarter from its stake in the Australia Pacific LNG project (APLNG).

Among individual stocks, Coles Group, a major grocer, saw its shares rise by as much as 0.8% after announcing a 3.4% increase in third-quarter revenue.

In New Zealand, the S&P/NZX 50 index remained relatively stable at 12,025.3 points.