Australian share market gains as banks, tech stocks rally

Interest rate sensitive stocks buoyed the benchmark on Thursday as softer-than-expected inflation data helped offset losses in the mining sector.

The Australian share market posted solid gains on Thursdays after highly anticipated approvals were granted to bitcoin exchange-traded funds in the United States.

At the closing bell, the benchmark S&P/ASX200 added 0.5 per cent, or 37.5 points, to 7,506, while the All Ordinaries rose by the same amount to 7,730.

The Aussie dollar was higher against its US counterpart, adding 0.3 per cent to US67.20c

Cryptocurrencies rose after the US Securities and Exchange Commission green lit exchange-traded funds that held bitcoin. Picture: AFP / Ozan Kose.

KCM Trade chief market analyst Tim Waterer said markets had been supported by Wednesday’s softer-than-expected inflation reading which showed consumer price growth eased to 4.3 per cent in the year to November.

“Part of the gains that we saw today were on the back of the encouragement taken from that softer CPI, which pretty much takes chances of an RBA hike off the table,” Mr Water said.

“Of course, the central bank will wait and see what happens with the quarterly reading (released on January 31) but [it is] so far so good in terms of the trajectory of inflation.”

After months of anticipation, the US Securities and Exchange Commission gave the green light to the first exchange-traded funds that hold bitcoin, the price for the token jumped to $US on bets that the move would draw new investors into the market.

Across the benchmark, utilities was the only one of the 11 industry sectors to finish in the red, with the benchmark buoyed by a rally in interest rate sensitive stocks.

The big four banks were the top performers after fresh inflation data showed prices cooled faster than forecast. Picture: NCA Newswire

Tech stocks were the top performers adding 1.2 per cent. Sector heavyweight Xero added 0.8 per cent to $110.13, Altium climbed 2.1 per cent to $46.06, Megaport rose 3.1 per cent to $8.99 and Wisetech firmed 1 per cent to $72.63.

The financials sector also lifted the benchmark after adding 1.1 per cent. The big four banks all finished higher, led by Commonwealth Bank up 1.4 per cent to $113.60, Westpac climbed 1.2 per cent to $23.24, ANZ gained 0.9 per cent to $26.06, and NAB was 0.8 per cent higher at $30.97.

Following recent falls in iron ore price, miners for the commodity finished lower. Fortescue tumbled 1.9 per cent, while Rio Tinto sank 0.4 per cent and BHP eased 0.1 per cent.

On Wall Street, the major indices rose ahead of key inflation data. The benchmark S&P/500 added 0.6 per cent, 0.3 per cent off its record high, while the Nasdaq and Dow Jones added 0.8 per cent and 0.5 per cent, respectively.

Traders are awaiting fresh US CPI data to be released in coming overnight which is expected to show the pace of annual inflation eased to 3.8 per cent in the year to December.

In corporate news, shares of Pinnacle Investment Management Group rose 1.2 per cent to $10.03. The investment management firm said its funds under management as of January 1, were higher than the average during the final six months of 2023.

Engineering firm Worley extended its losses, diving 2 per cent to $16.20 as it denied findings made by an Ecuadorean tribunal that the company had acted in a corrupt manner.

Originally published as Australian share market gains as banks, tech stocks rally