Australian shares rebound as banks and miners gain, US-Iran deal hopes rise

Australian shares rose on Wednesday after two straight sessions of losses, with index heavy weights banks and miners leading the rebound, while the U. S. signaling it may be nearing a deal with Iran pulled down oil prices and lifted investor risk sentiment. The S&P/ASX 200 index climbed 0. 6% to 8, 733. 40 by 0033 GMT. The benchmark closed 0. 2% lower on Tuesday. The Reserve Bank of Australia (RBA) raised its benchmark rate for the third time this year on Tuesday and cautioned that inflation would remain sticky as the Middle East conflict unleashed an oil shock globally. Standard Chartered said it expects the RBA to keep its cash rate at 4. 35% for the foreseeable future and that more hikes cannot be ruled out, although the bar for the central bank to tighten policy further is high. “We are also closely watching the risk of demand destruction if fuel prices stay high, or if shortages of imported refined fuel become more acute – which may help close the excess-demand gap more quickly, ” StanChart said in a note. Swaps, however, imply an 84. 8% probability of a 50-basis-point rate hike in June. Financials advanced 1. 6% after shedding nearly 1% in a three-day losing run. All the “big four” banks rose between 1. 5% and 2. 5%. Miners climbed 0. 3% after copper prices rebounded from three-week lows on bargain-buying. Energy stocks were among the major laggards, declining 1. 2% as crude oil prices fell for a second day after U. S. President Donald Trump indicated a possible peace deal may be reached to end the war with Iran. Consumer discretionary stocks lost 0. 5%, dragged down by a 2. 3% fall in electronics retailer JB Hi-Fi after the company flagged cost increases, stock shortages and heightened competition heading into the end of the fiscal year. In New Zealand, the benchmark S&P/NZX 50 index jumped 1% to 13, 168. 93.

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