News from AAP

Aust stocks rise ahead of US rates outcome

Print This Post A A A

The Australian share market has climbed higher as the US Federal Reserve decides whether to hike its benchmark interest rate.

Energy stocks have surged after crude oil prices rallied overnight on a US petroleum report which showed lower inventories and production in North America, Bell Direct equities analyst Julia Lee said.

She said higher commodity prices, including copper which rose on the back of an earthquake in Chile, have also boosted mining stocks.

However, weighing on investors the most, is the pending US Federal Reserve’s interest rate decision due around 0400 AEST on Friday, she said.

“The market is trying to price in what is going to happen tomorrow and this morning it tracked US futures which priced in a 28 per cent chance of a hike with a 63 per cent (chance of a) hike in December,” Ms Lee said.

“If tomorrow we don’t see that happening and we see a rate hike in September then we will see the gains from today disappear.”

Ms Lee said the Fed’s interest rates outlook would also be just as important.

“If we see a rates hike tomorrow but the Federal Reserve discounts another rate hike later on in the year, well that’s less than the two rate hikes they were flagging, and that would also have a big impact on the market,” she said.

Among the energy stocks, Santos added 10 cents to $5.00, Oil Search was up 14 cents at $7.57 and Woodside Petroleum rose four cents to $29.95.

Diversified miner BHP gained 68 cents to $24.65, Rio Tinto added 70 cents to $52.01, while Fortescue Metals was up four cents at $2.09.

As for the banks, Commonwealth Bank was up 24 cents at $75.59, National Australia Bank gained 42 cents at $30.93, Westpac rose 28 cents to $31.35, while ANZ was up 30 cents to $28.18.

KEY FACTS

* At 1615 AEST on Thursday, the benchmark S&P/ASX200 index was up 47.9 points, or 0.94 per cent, at 5,146.8 points.

* The broader All Ordinaries index was up 47.6 points, or 0.93 per cent, at 5,171.2 points.

* The December share price index futures contract was up six points at 5,107 points, with 30,994 contracts traded.

* National turnover was 1.8 billion securities worth $6.7 billion.