Australian shares extended gains as banks rose; Retail sales data in the spotlight

Australian shares rose on Thursday as inflation fell to a 13-month low, boosting banking stocks. Investors are waiting for the retail sales data, but US Federal Reserve Chairman Jerome Powell, who hinted at more interest rate hikes, kept the gains in check.

The S&P/ASX 200 rose 0.3% to 7,219.1 at 00:30 GMT. The benchmark index closed 1.1 percent higher in the previous session.

Powell reiterated on Wednesday that the central bank is likely to go ahead with rate hikes and did not rule out raising the cost of borrowing at a policy meeting scheduled for late July.

In Australia, consumer inflation slowed to a 13-month low in May, driven by a sharp drop in fuel prices, while core inflation also slowed, a sign that interest rates may not have to rise again in July.

Financial stocks rose 0.9% amid higher interest rates. The four big banks added gains to the benchmark, with ANZ Group rising as much as 1.3%.

Investors are now awaiting retail sales data from the country, which is due at 0130 GMT.

Companies operating in the energy sector rose 0.4% as oil prices rose 3% overnight. Shares of oil and gas majors Woodside Energy and Santos rose 0.5% and 0.4%, respectively.

Information technology shares also followed their foreign peers, gaining 1.6%. Computer giants Xero and Megaport rose 1.4% and 0.3%, respectively.

Mining companies fell 0.6% on weak industrial data from the world’s second largest economy, China.

Iron ore giants BHP Group, Rio Tinto and Fortescue Metals were down 0.2%, 0.5% and 0.5%, respectively.

Gold stocks limited the index’s gains, falling 0.7%. Bullion prices hit a four-month low overnight.

The two major players in the sector, Newcrest Mining and Northern Star Resources, fell 0.6% each.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 settled at 11,729.1.