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Australian shares climbed on Thursday, with the S&P/ASX 200 index gaining 0.6% to 8716.5, recovering from a 0.2% decline in the previous session. The market was buoyed by a rebound in banking stocks and strong performances in the mining and gold sectors, driven by positive commodity prices and easing policies in China.
Banking Sector Rebounds on Interest Rate Prospects
Financials led the market's gains, advancing 0.7%, after three consecutive days of losses. The rally was supported by expectations that interest rates in Australia will remain elevated for the foreseeable future. A higher interest rate environment typically benefits banks by widening their profit margins.
National Australia Bank (ASX:NAB) and Commonwealth Bank of Australia (ASX:CBA) were among the top performers in the sector, rising 1.3% and 1%, respectively.
The optimism comes despite the Reserve Bank of Australia's decision earlier in the week to keep the cash rate steady. The central bank maintained a hawkish tone, which reduced investor expectations of a rate cut in December. This sentiment was further fueled by inflation data showing that Australia's inflation rate dropped to a three-year low in August, thanks in part to government-issued electricity rebates.
Mining Sector Boosted by Strong Iron Ore Prices
Mining stocks also contributed to the market's upward movement, gaining 0.3% as iron ore prices surged. The rise in iron ore prices was supported by China's latest monetary easing measures, which have boosted market sentiment. Additionally, a reduction in global supply helped maintain the upward pressure on prices.
BHP Group (ASX:BHP) and Rio Tinto (ASX:RIO), two of Australia's largest mining companies, added 0.2% and 1.1%, respectively, further supporting the broader market rally.
Gold Stocks Shine on Record Bullion Prices
Gold stocks also performed strongly, with the sector advancing 1.1% after bullion prices hit a record high overnight. The rise in gold prices was a boon for Australian gold miners, with Genesis Minerals (ASX:GMD) gaining 0.5% and Northern Star Resources (ASX:NST) up 0.9%.
The surge in gold prices has been fueled by global economic uncertainties, driving investors toward safe-haven assets like gold. This trend has particularly benefited Australian gold producers.
Brickworks Emerges as Top Gainer
Brickworks Ltd (ASX:BKW) was the standout performer on the ASX 200, rising as much as 9%. The surge came after the company reported better-than-expected full-year results, with underlying net profit exceeding analyst estimates. In addition to the profit beat, Brickworks announced an increased final dividend of 43 Australian cents per share, which helped to offset a slight decline in overall results.
Global Market Overview
On the global front, U.S. markets were relatively stable on Wednesday, with the S&P 500 index remaining mostly unchanged, while the Nasdaq gained marginally, adding 7.68 points (0.04%).
Meanwhile, in New Zealand, the benchmark S&P/NZX 50 index rose 0.9% to 12,340.09, reflecting a positive trading session in the broader Australasian region.
