Business Recorder
Australian shares jumped nearly 3% on Wednesday in a broad-based rally after the United States and Iran agreed to a two-week ceasefire, while stocks in New Zealand held onto gains after the central bank left its cash rate unchanged as expected. The S&P/ASX 200 index was trading 2.7% higher at 8,964.30 points, as of 0254 GMT, slightly below the day’s high, while New Zealand’s benchmark S&P/NZX 50 index traded 1.5% higher at 13,268.16 points. The Reserve Bank of New Zealand (RBNZ) kept its policy rate unchanged at 2.25% for a second straight meeting, but signalled that it is ready to take action if inflation pressures intensify as the Middle East crisis drives up fuel and transport prices. The decision was fully priced in, with all 32 economists in a Reuters poll forecasting that the RBNZ would hold the official cash rate steady. Westpac called the decision “a modest hawkish surprise” for markets, flagging that the central bank’s policy statement revealed a “tightening bias”. Investors globally rushed into risk assets and oil prices tumbled below $100 a barrel after the United States and Iran agreed to an 11th hour ceasefire deal, capping a whirlwind day dominated by President Donald Trump’s threats to Iran. In Australia, all major sectors except energy gained sharply on the development. Financials and resources, which account for more than half of the benchmark, soared as much as 3.5% and 5.3%, respectively. All the “Big Four” banks gained between 2.8% and 4%, while major miners BHP, Rio Tinto, and Fortescue jumped between 3% and 5%. An index of top 20 companies advanced 2.7%, heading for its best day since late February. Energy stocks lost some of their risk premium, tumbling 7.1% as the ceasefire triggered a more than $12 fall in US crude futures. Woodside Energy slumped as much as 12%, while Santos fell 7.7%. Gold stocks mirrored gains in bullion prices to jump 6.6%.
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