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Australian Shares Rise with an Eye on Upcoming Federal Reserve Meeting

April 29, 2024

Australian shares climbed on Monday, driven by gains in financial and healthcare sectors. The S&P/ASX 200 index saw an uplift of 0.8%, marking its best performance since April 22, closing at 7,637.4 points.

Chart showing ASX upswing, closing at 7651.75 on VT Markets trading app.

SEE: ASX sees upswing, closing at 7651.75 on VT Markets trading app.

This rise mirrored the positive trends on Wall Street as investors await the U.S. Federal Reserve’s policy meeting this week, which could shed light on future interest rate decisions.

Interest Rate Speculation

The Fed’s meeting, set to start on Tuesday, has the market abuzz, although the central bank is likely to maintain current rates. However, the market will be paying close attention to any hints regarding future rate adjustments.

Given recent U.S. economic data, expectations lean towards no rate cuts before September. Market predictions now show a 58.4% likelihood of a rate cut in September.

Inflation data from the last quarter indicated a slower than anticipated decrease in inflation rates, causing a shift in local interest rate cut forecasts. The Reserve Bank of Australia will likely wait for the Fed’s actions before making any rate changes.

Sector-wise, financial stocks gained with the financial sub-index rising by 0.6%. The major banks saw their shares increase by between 0.3% and 0.8%. Healthcare stocks also performed well, with the sector index climbing 1.2%, supported by gains in biotechnology leader CSL and Ramsay Health Care, which increased by 0.6% and 2.02% respectively.

Mining and Technology

Mining stocks showed moderate gains, with the mining sub-index rising 0.5%. Notable miners Rio Tinto and Fortescue Metals recorded increases of 0.1% and 0.3%, respectively. Conversely, BHP Group saw a slight decline of 0.4% amidst rumors of a potential increased offer for Anglo American.

Gold and technology sectors also experienced gains, with gold stocks rising 0.5% and technology stocks jumping 1.7%, echoing the positive trends seen in international markets.