ASX300 Index Rally Lifts Markets to 3-Month High as Rate Cut Bets Strengthen

May 16, 2025 10:55 AM AEST | By Team Kalkine Media

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ASX300 Index Rally Lifts Markets to 3-Month High as Rate Cut Bets Strengthen — Image source: shutterstock

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Highlights

ASX extends winning streak as rate cut expectations fuel market

Commonwealth Bank hits all-time high amid financial sector rally

Gold and real estate stocks shine on broader ASX300 surge

Australian shares surged to a three-month peak on Friday morning, buoyed by growing optimism that central banks may begin trimming interest rates. The S&P/ASX 200 jumped 1% in early trade, gaining 80.9 points to reach 8378.4, marking its eighth straight day of gains — the longest winning streak since August.

The rally came as economic data from both Australia and the US signalled slowing growth, strengthening expectations for rate cuts. In the US, softer-than-expected retail sales and a notable drop in producer prices — the biggest decline in five years — hinted at easing inflationary pressures. These developments prompted a decline in US Treasury yields and a rise in gold prices. The S&P 500 climbed 0.4%, while the Dow Jones added 0.7%.

Back home, strong labour force data didn’t deter Australian bond traders, who remain confident the Reserve Bank of Australia (RBA) could trim rates at its next meeting. Money markets are nearly fully pricing in a quarter-point rate reduction, a development seen as supportive for equities — especially interest-rate sensitive sectors like banks, real estate, and consumer shares.

Among the standout performers, Commonwealth Bank (ASX:CBA) rose 1.5% to a new record high. Other major lenders including National Australia Bank (ASX:NAB), Westpac (ASX:WBC), and ANZ Group (ASX:ANZ) also posted solid gains. Property stocks benefited from the rate outlook, with Goodman Group (ASX:GMG) up 2% and Vicinity Centres (ASX:VCX) advancing 2.2%.

Gold miners rallied in tandem with the precious metal’s price jump. Evolution Mining (ASX:EVN), Regis Resources (ASX:RRL), and Newmont Corporation (ASX:NEM) each gained more than 4%.

Healthcare also added to market strength, driven by CSL (ASX:CSL), which climbed 1.8%.

Elsewhere on the ASX300 index, tech company Appen (ASX:APX) surged 17.9% after setting full-year revenue guidance between $235 million and $260 million and targeting positive underlying earnings. Investors responded favourably to the turnaround efforts.

Meanwhile, GPT Group (ASX:GPT) edged 0.9% higher after revealing a $460 million joint venture investment with QuadReal aimed at expanding its logistics footprint in Australia.

While Dexus (ASX:DXS) slipped 0.6% on regulatory concerns regarding its stake in airport operator APAC, NRW Holdings (ASX:NWH) gained 1.9% after absorbing a $113 million impairment related to Whyalla port operations.

For those tracking stable income opportunities, the rising interest in ASX dividend stocks continues as market conditions evolve. A range of dividend-paying companies listed in the ASX300 index offer options for income-focused investors (ASX dividend stocks) within the broader ASX300 index.

As global monetary policy appears to shift towards easing, Australian equities — particularly those in the ASX300 — are riding a wave of optimism.

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