Australian Shares Bolstered By Financial And Energy Firms

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As heavyweight financials and energy firms surged, Australian shares rose by the greatest in more than a week, helping the benchmark index recover losses for the week.

The S&P/ASX 200 index.AXJO finished 1.8% higher at 6,758.8, mirroring Wall Street’s spectacular recovery after an earlier sell-off driven by red-hot U.S. inflation figures. The benchmark completed the week flat after increasing 4.5% the previous week.

Data showing a larger-than-expected increase in U.S. consumer prices last month strengthened expectations that the Federal Reserve will increase interest rates by 75 basis points for the fourth time in a row at its Nov. 1-2 meeting. MKTS/GLOB

Given the fears of a global recession, J.P. According to Morgan market strategist Kerry Craig, the more significant U.S. inflation figure indicated that rising interest rates were not currently bad for the markets.

Craig mentioned Australia in his statement, “I still believe that the Reserve Bank of Australia will push interest rates higher this year to over 3% as the inflation backdrop will warrant the same.”

Energy stocks.AXEJ gained 3.8%, leading gains on the resource-heavy Australian market, as oil prices reversed previous losses due to a lower U.S. dollar and a drop in diesel inventories. The sub-index, on the other hand, fell 1.5% for the week. O/R

“There are a significant number of listed energy stocks in Australia. They range from multi-billion-dollar companies like Woodside Petroleum Ltd [ASX: WPL] down to tiny explorers with part interest in one exploration permit. Energy stocks also include coal miners, as thermal coal is a major electricity generation source, “ stated Money Morning.

On Friday, Woodside Energy WDS. A.X. and Santos STO. A.X. gained 4% and 4.4%, respectively.

Financials.AXFJ gained 1.6% for the third day in a row, with the country’s “big four banks” rising between 0.5% and 2%. For the week, the sector gained 3.1%.

However, gold stocks.AXGD fell 1.3%, while Newcrest Mining NCM. A.X. and Northern Star Resources NST.AX fell 1.2% and 1.9%, respectively. The sub-index had its worst week in five years.

The benchmark S&P/NZX 50 index.NZ50 in New Zealand increased 0.5% to 10,868.1 but fell 2.1% for the week.

Fonterra FGC. N.Z. declined 0.4% after the dairy company cut its milk collection prediction for 2022/23 for the second time in less than a month.

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