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Banks lift Australia shares as softer GDP data renew rate-cut bets

Credit: REUTERS/STEVEN SAPHORE

March 7 (Reuters) - Australian shares inched higher on Thursday boosted by the gains in financial stocks, as weaker-than-expected domestic growth data for the fourth quarter renewed market bets for interest rate cuts.

The S&P/ASX 200 index .AXJO rose 0.2% to 7,745.5 by 2352 GMT. The benchmark rose 0.1% on Wednesday.

The Australian Bureau of Statistics reported a slower-than-expected growth in gross domestic product for the October-December quarter on Wednesday, indicating that the Reserve Bank of Australia's (RBA) measures to tackle soaring inflation have been successful in bringing down consumer demand in the country.

"Looking ahead, the economy is expected to see continued weakness near-term with a policy 'pivot' providing more support from the middle of the year," Westpac analysts said in a note.

"An improving inflation situation should allow the RBA to begin moving interest rates lower from September."

Meanwhile, analysts at Citi expect quarter-basis points cuts in August and November this year.

Rate-sensitive financials sub-index .AXFJ rose 0.4% to touch its highest level in more than 16 years. The country's largest lender Commonwealth Bank of Australia CBA.AX added 0.4%, while National Australia Bank NAB.AX gained 0.7%.

Technology stocks .AXIJ tracked overnight gains in U.S. peers and climbed 1.2%, paring some of their losses from Wednesday.

Wisetech Global WTC.AX rose 1.1%, while Xero XRO.AX advanced 1.7%.

Gold stocks .AXGD gained 1%, as bullion prices extended their rally. GOL/

Northern Star Resources NST.AX jumped 1.8% and Evolution Mining EVN.AX climbed 0.8%

Bucking the trend, miners .AXMM fell 0.4%, as iron ore futures declined on a weak steel market and lack of stimulus from top consumer China. IRONORE/

Behemoth miners BHP Group BHP.AX and Rio Tinto RIO.AX lose 1.3% and 2.5%, respectively.

Energy stocks .AXEJ retreated 1%, with Woodside Energy WDS.AX losing 2.8%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.3%, or 37.77 points, to 11,833.67.

(Reporting by Sneha Kumar in Bengaluru; Editing by Rashmi Aich)

((Sneha.kumar@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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