Australian Shares Rise, Investors Await Inflation Data Amidst Global Developments

Australian shares: Australian shares mirrored the upward trajectory of their Wall Street counterparts on Wednesday, buoyed by a resurgence in investor confidence following a reduction in geopolitical tensions. The S&P/ASX 200 index climbed 0.5 per cent to reach 7,722.60, building on its 0.5 per cent gain from the previous day.

The positive sentiment emanating from Wall Street's rebound prompted Australian investors to focus on domestic factors, particularly the impending release of crucial inflation data. Market participants are eagerly awaiting the March-quarter inflation figures, which are expected to provide insights into the Reserve Bank of Australia's (RBA) monetary policy stance.

According to analysts surveyed by Reuters, the consensus forecast anticipates a 0.8 per cent increase in the consumer price index for the March quarter. Notably, only 8 per cent of market participants, as per the RBA Rate Tracker data from April 23, anticipate a rate cut by the RBA at its upcoming May meeting.

Against this backdrop, rate-sensitive financial stocks experienced a notable uptick, with Australia's "Big Four" banks posting gains ranging from 0.8 per cent to 1 per cent. Energy sector stocks also advanced by 0.8 per cent, buoyed by the upward movement in global oil prices driven by a weaker U.S. dollar. Leading energy companies such as Woodside Energy and Santos saw their shares rise by 0.9 per cent and 1.3 per cent, respectively.

Healthcare stocks were among the top performers, with the biotech giant CSL contributing to a 1.1 per cent gain in the sector. Meanwhile, gold stocks surged by nearly 2 per cent as investors sought safe-haven assets amidst escalating tensions, particularly after intensified Israeli strikes across Gaza.

The optimism extended to Australian information technology stocks, which tracked the positive performance of the tech-heavy Nasdaq index, while real estate stocks also recorded a notable uptick of 1 per cent.

However, the mining sector faced headwinds, declining by 0.6 per cent as iron ore prices softened due to subdued demand in China, the world's largest consumer. Mining giants BHP Group and Fortescue witnessed declines of 1.2 per cent and 1 per cent, respectively, following the latter's report of a 6 per cent decrease in quarterly iron ore shipments.

Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index mirrored the positive sentiment, rising by 0.4 per cent to reach 11,849.78 points. Overall, the Australian market's upward momentum reflects a cautious optimism among investors, tempered by anticipation for key economic data and ongoing global developments.

With Reuters Inputs