Australian Shares Reach Two-Month Peak

Australian equities ascended to a two-month high on Friday, buoyed by gains in the financial sector which countered losses among gold stocks. The S&P/ASX 200 index increased by 0.5% to reach 8,188.40 as of 0050 GMT, marking its highest point since March 5.

The benchmark is poised to record its third successive week of gains.

Banking Sector Drives Growth

Major banking institutions spearheaded the benchmark’s advancements, climbing 0.8% to levels unseen since February 19. This sub-sector is also on track for a third straight week of positive performance. The nation’s ‘big four’ banks each saw increases between 1% and 1.5%.

Gold Stocks Decline

Conversely, gold stocks experienced a downturn of 1.1%, heading towards a weekly loss exceeding 4%. This marks the fifth consecutive day of declines, influenced by a drop in bullion prices to a two-week low. This was driven by indications of easing trade tensions between China and the U.S., coupled with a holiday in China, a major consumer.

Tech and Energy Sectors Rise

Technology stocks saw a rise of 0.4%, mirroring gains on Wall Street. This was fueled by robust results from tech giants Microsoft and Meta, alleviating concerns regarding expenditure on artificial intelligence. Energy stocks also climbed, increasing by 0.7%, as oil prices were boosted following threats of secondary sanctions on Iran by the U.S. President.

Mixed Performance in Mining

Mining stocks traded within a tight range, ultimately rising by 0.2%. BHP Group, the world’s largest listed miner, decreased by 0.9%, while Rio Tinto and Fortescue experienced gains of 0.4% and 1.4%, respectively. The sub-sector is down 0.6% for the week, following three weeks of gains.

RBA Meeting in Focus

Looking ahead, investors are anticipating the Reserve Bank of Australia’s (RBA) two-day monetary policy meeting, commencing on May 19. Markets anticipate a reduction in the cash rate from its present level of 4.10% to 3.60%. According to the RBA rate tracker, as of May 1, 56% of surveyed market participants foresee a rate cut to 3.60%.

In New Zealand, the S&P/NZX 50 index increased by 0.3% to reach 12,192.45.