MELBOURNE, Australia--Banks and resources stocks helped drive a broad rally in Australian stocks Tuesday, as the market ended higher after recovering from steep losses in the previous two sessions.
Finishing toward the highs of the day, the S&P/ASX 200 jumped 99.3 points, or 1.8%, to close at 5783.8. It was its strongest single-day rise since November.
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The four biggest banks, which have a heavy weight in the market, collectively added more than 33 points to the index. All industry subindexes advanced.
"Value hunters have leaped on the opportunity created by recent selling," said Ric Spooner, chief market analyst at CMC Markets in Sydney.
The market held its gains after the Reserve Bank of Australia held rates steady at a record-low 1.5% for an 11th straight meeting and maintained a neutral tone in the accompanying statement. The decision had been expected. Still, some traders had been anticipating that the RBA would adopt at least to some degree the hawkish tone recently set by some of its counterparts abroad. After it failed to do that, the local currency and bond prices fell.
The RBA continues to see a broad-based acceleration in global growth and forecasts domestic growth and inflation to gradually pick up, said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney. The central bank also sees signs that conditions in the Sydney and Melbourne property markets are starting to ease and expects that regulatory measures should help address risks related to household debt, Mr. Oliver said.
Westpac Banking led the major lenders, climbing 3.3% to its highest close in almost seven weeks. National Australia Bank was 2.8% higher, Australia & New Zealand Banking gained 2.2% and Commonwealth Bank of Australia picked up 1.9%.
Diversified mining companies BHP Billiton and Rio Tinto gained 2.3% and 0.8%, respectively, and South32 added 1.9%. Iron-ore producer Fortescue Metals Group was flat.
Gold producers, however, faltered after futures overnight recorded their biggest slide of 2017. Newcrest Mining slipped 0.9%.
Among energy shares, Woodside Petroleum rose 1.1%, Oil Search gained 1.2% and Santos was up 0.7%.
Retailers were broadly stronger for the session, buoyed after stronger-than-expected retail sales figures showing a 0.6% rise in May from the previous month.
For the day, 2.11 billion stocks were traded valued at 5.92 billion Australian dollars (US$4.54 billion), Commonwealth Securities said.
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(END) Dow Jones Newswires
July 04, 2017 03:44 ET (07:44 GMT)