Australian shares ended higher on Wednesday as large mining stocks continued to benefit from stronger commodity prices, while a surge in real estate stocks also lent support.
The S&P/ASX 200 index rose 0.5 per cent or 32.30 points to 6,685.50 at the close of trade. The benchmark rose 0.1 per cent on Tuesday.
Miners BHP Group and Rio Tinto, the two heaviest stocks on the index, ended 0.1 per cent and 0.6 per cent higher, respectively. The two have been on a tear in recent sessions, tracking large gains in iron ore prices.
Chinese iron ore prices scaled record highs this week.
Goodman Group and Scentre Group, some of the largest real estate stocks in the country, closed 3.1 per cent and 1.5 per cent higher after an interest rate cut by the Reserve Bank pointed to easier property lending conditions.
" You have more loans, more entrants can come into the markets cause rates are so low… this should slightly recover the property market," said Dale Raynes, associate director at CPS Capital, while noting that the local property market was "pretty flat" at the moment.
Financial stocks ended slightly higher after the big four banks scaled back some of their losses. The stocks had dropped in the face of stricter lending conditions being proposed by the securities regulator, while many perceived that lower rates would crimp the banks' margins.
However, there was also an upside to the lower rates, as noted by Raynes, who said "the banks are notoriously bad at passing down rates, and they can sometimes absorb the extra margin, which could be viewed as positive for the banks."
Raynes also noted that cheaper lending in the country could push up lending volumes with more entrants to the market.
For the day, National Australia Bank closed 0.5 per cent higher, while the other three of the big four edged lower.
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