Anticipation of an interest rate reduction drove Australian shares to finish at a record high on a recent Friday.
The boost, stimulated by rate-sensitive financial stocks, follows the U.S.
Federal Reserve’s indication of potentially transitioning towards lowering rates over the next year.
The S&P/ASX 200 index posted a 1.1% increase, concluding at 7,847.00.
The benchmark even soared to an unmatched peak of 7,853.10 earlier in the day - marking the second record-breaking instance in the same week.
Fourth quarter Gross Domestic Product data highlighted a slower-than-projected growth rate in Australia, suggesting the nation’s central bank may initiate rate cuts in the ensuing 12 months.
In testimony to U.S.
lawmakers, Fed Chair Jerome Powell intimated that rate cuts could surface in the near future, however, only if justified by a downward inflation trend.
IG Markets analyst Hebe Chen argues that these signals suggest major financial sector players are poised to benefit from this transformative monetary policy shift.
Financials jumped 2% to achieve a staggering 16-year high, with the ‘big four’ banks escalating between 1.7%-2.6%.
Commonwealth Bank of Australia (ASX:CBA) ended at its highest point ever after advancing 1.8%.
National Australia Bank swelled by 2.3% to culminate at a substantial nine-year high.
Healthcare stocks also made gains, elevated by biotechnology heavyweight CSL.
Notably, an increase in Brent prices bolstered the energy sector, led by Woodside Energy and Santos.
In other developments, gold mining company Ramelius Resources (ASX:RMS) saw a 1% increase upon confirming talks with Karora Resources for a potential acquisition of the Canada-based mine operator.
Finally, New Zealand’s S&P/NZX 50 Index rose 1% to finish at 11,923.72.
The Commonwealth Bank of Australia (ASX:CBA) is an Australian multinational bank providing various banking products and financial services, including retail, business and institutional banking, funds management, superannuation, insurance, investment, and broking services.