Key Takeaways
- Australian shares climbed on Friday, buoyed by mining stocks.
- The Reserve Bank of Australia's Governor warned of inflation risks due to global factors.
- Markets expect the RBA to raise interest rates by 25 basis points in September.
Australian shares saw a rise on Friday, with the S&P/ASX 200 index climbing 0.3% to 8760.6 points by 0002 GMT, marking a third consecutive session of gains.
The central bank governor, Michele Bullock, warned that inflation risks were materialising, citing the Middle East conflict and the AI boom as key factors driving prices higher.
July inflation figures came in hotter than anticipated, increasing the likelihood of further interest rate hikes by the Reserve Bank of Australia (RBA).
UBS expects the RBA to raise the cash rate by 25 basis points in both September and November, driven by AI investment, surging oil prices, and global central banks' hawkish stance on inflation.
Markets currently imply a 92% chance that the RBA will lift its 4.35% cash rate by 25 basis points at its next meeting on September 29.
Mining stocks, particularly iron ore and copper, saw gains, with BHP and Rio Tinto up about 0.8% each, while gold miners strengthened 3.2% on strong bullion prices.
Technology stocks also saw a boost, with Megaport and Codan rising 2.1% and 2.7% respectively, marking their best day in two weeks.
Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index added 0.1% to 13,767.51 points, showing a mixed performance.
Despite the gains, the mining sub-index fell 0.8% for the week, marking a third straight week of losses.
