Aussie shares lift as weak growth softens rate outlook
The ASX rose after cooler-than-expected economic growth figures became the latest in a string of soft data to obviate the need for further interest rate hikes.
The S&P/ASX200 rose 41.8 points, or 0.48 percent, to 8,766.2 points at midday, while the All Ordinaries index rose 33.7 points, or 0.39 percent, to 9,001 points.
The Australian economy grew by 0.3 percent in the three months to March, remaining 0.5 percent below expectations and at 2.5 percent on an annual basis.
The figures made it less likely that the Central Bank will continue to raise the cash rate in a bid to curb sticky price growth after April’s employment and inflation figures came in softer than expected.
The ASX-listed mining sector was doing heavy lifting, with BHP and Rio Tinto hitting new record highs as copper prices soared, with supplies up two per cent.
Energy stocks rose 1.4 percent as Brent crude rose to $97 a barrel, tensions in the Middle East continued to flare and U.S.-Iran talks came to an apparent halt.
“While commodity markets remained relatively stable overnight, investors remain alert to developments that could rapidly change energy prices or the broader risk appetite,” Moomoo trading manager Chris Strazzeri said.
Coal miners also made progress and uranium stocks staged a comeback as resurgent AI rhetoric lifted Wall Street’s tech-led Nasdaq to new highs overnight.
However, this increase was not universal and chip manufacturers and data center infrastructure were preferred and sold instead of software companies.
Sales were also seen in the local market, with Xero, WiseTech and Life360 each falling between two and three per cent, while data center group NextDC was up 2.8 per cent.
Australia’s heavyweight financial sector continues to weaken due to a softening housing market, growth concerns and a change in tax regime; The sector is trading roughly flat, with three of the four major banks posting small gains and insurers and investment firms losing ground.
According to Russel Chesler, head of investments and capital markets at VanEck, consumer discretionary rights fell 0.5 percent, leaving this segment vulnerable in the current economic situation.
“Australia may now be entering a stagflationary regime of low growth and high inflation,” Mr Chesler said.
“GDP growth is slowing, unemployment is rising and inflation remains high.”
Ampol shares gained more than two per cent after the competition watchdog approved the refinery operator’s acquisition of EG Australia, subject to conditions, according to company news.
Maggie Beer rose 14 per cent after receiving a takeover offer of up to $10 million from an unnamed suitor for its Hamper and Gifts Australia (HGA) business.
The Australian dollar fetches 71.77 US cents; which is roughly the same as 71.78 US cents at 5pm AEST on Tuesday.
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