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Financials lift Australian shares higher on c.bank's upbeat economic outlook

Published 03/02/2021, 11:27 am
Updated 03/02/2021, 11:30 am
© Reuters.
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* Financials hit 11-month peak

* ASX200 eyes third straight day of gains

* NZ unemployment rate drops more than expected

By Arpit Nayak

Feb 3 (Reuters) - Australian shares rose on Wednesday, as financials led gains boosted by the central bank's upbeat economic outlook, while investors awaited a speech by its governor Philip Lowe later in the day.

The S&P/ASX 200 index .AXJO rose 0.8% to 6,815.1 by 2350 GMT, though gains were limited by losses in heavyweight miners.

Sentiment was also lifted after all three major U.S. stock indexes ended higher for a second straight session, with tech giants Amazon.com AMZN.O and Google-parent Alphabet GOOGL.O advancing ahead of their results and as optimism grew over progress on a U.S. coronavirus aid package. .N

Reserve Bank of Australia (RBA) chief Lowe is set to present a speech in Canberra at 0130 GMT, outlining the bank's policy settings for the upcoming year, a day after the RBA held its cash rate and said it would expand its quantitative easing programme. RBA is also slated to release its updated economic forecasts on Friday, when Lowe and senior officials appear before a parliamentary economics committee.

Financials .AXFJ climbed as much as 1.7% to their highest since March last year, extending gains from the previous session following the RBA's upbeat outlook for the economy on Tuesday. The 'Big Four' banks gained between 1.7% and 2%. Petroleum WPL.AX led gains among energy stocks .AXEJ , as oil prices hit their highest in a year on supply cuts. O/R

On the flip side, tumbling iron ore prices on weak Chinese demand ahead of the Lunar New Year holidays saw miners .AXMM give up 1.7%.

New Zealand's benchmark S&P/NZX 50 index .NZ50 was trading nearly flat at 13,040.11, even after data showed the island nation's fourth-quarter jobless rate dropped to 4.9%, beating analyst forecasts. Reserve Bank of New Zealand's employment and inflation mandates are now looking more achievable, with the economy better placed to weather headwinds than previously feared, analysts at ANZ said in a note.

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