Credit: REUTERS/Daniel MunozBy Poonam Behura
March 30 (Reuters) - Australian shares rallied 1% to finish at a near three-week high on Thursday, as outlook from U.S. firms improved and banking crisis worries eased, while domestic inflation data boosted hopes of a pause from further rate hikes by the central bank.
The S&P/ASX 200 index .AXJO closed 1% higher at 7,122.3 points, marking a fourth consecutive session of gains.
Investors will eye the Reserve Bank of Australia's (RBA) policy meeting on April 4 where analysts are split between a quarter-point rate hike and a pause, after recent data indicated a cumulative 350 basis point (bp) hikes since May last year were starting to impact growth.
Among the country's top banks, Commonwealth Bank of Australia and Westpac Banking Corp expect a pause by the RBA, while National Australia Bank and ANZ Group see a 25 bps hike.
"The domestic economy is now showing sufficient signs of slowing and we expect the RBA board will judge that a pause in the tightening cycle is the appropriate move in April," Gareth Aird, head of Australian Economics at CBA said in a note.
However, analysts at ANZ Research projected two more rate hikes, and said "an extended period of restrictive rates will be required to bring inflation back to target".
Globally, sentiment improved on rally in U.S. stocks as robust outlook eased worries regarding the country's economic health, with fears of a banking sector crisis also fading. .N
In Australia, miners were the top gainers, rising 1.7% and hitting their highest since March 10. Heavyweight miners like Rio Tinto RIO.AX and BHP Group BHP.AX jumped 1.8% and 2.4%, respectively.
Banks .AXFJ recovered from the previous session, rising 1.5%. The so-called "Big Four" banks added between 0.9% and 2.3%.
Technology stocks .AXIJ rallied 1.7%. Block Inc's SQ2.AX ASX-listed shares advanced 2.4%, while Xero XRO.AX added 1.9%.
New Zealand's benchmark S&P/NZX 50 index .NZ50 ended 1.7% higher at 11,933.17.
(Reporting by Poonam Behura in Bengaluru; editing by Uttaresh Venkateshwaran)
((Poonam.Behura@thomsonreuters.com))
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