S&P/ASX 200 index up 0.3%
Banks rebound, rising 1.3% on rate cut hopes
Lithium miners drag on CATL restarting output at key mine
Sept 10 (Reuters) – Australian shares rose on Wednesday, led by heavyweight banks that rallied on expectations of more domestic interest rate cuts, outpacing sharp declines in lithium miners hit by reports of battery major CATL restarting output at its key Chinese mine.
The S&P/ASX 200 index closed 0.3% higher at 8,830.4 points. The benchmark ended 0.5% lower on Tuesday.
In Sydney, local consumer sentiment retreated in September from the 3-1/2-year high hit in August, as economic outlook concerns outweighed improving family finances, boosting expectations for Reserve Bank of Australia (RBA) rate cuts.
Lower rates typically help banks reduce funding costs and maintain lending margins, potentially boosting profitability.
This year, the RBA eased rates by a cumulative 75 basis points in February, May and August, after assessing quarterly inflation prints. Investors now await fresh inflation data, due later this month, for further policy cues.
Heavyweight banks rose 1.3%, fully recouping losses from the past two sessions to close at a one-week high. National Australia Bank, which cut 410 jobs, gained 1.5%.
With miners under pressure, capital is rotating back into banks, especially as cost-cutting measures continue to support sentiment, said Tony Sycamore, market analyst at IG.
Miners fell 1.8%, tracking a fall in global lithium stocks after Chinese state media reported Contemporary Amperex Technology could resume production sooner than previously indicated at its key Yichun mine.
Liontown Resources dropped 18.4% to lead lithium miner declines. Pilbara Minerals and IGO fell 17.3% and 14%, respectively, ranking among the benchmark’s worst performers.
Easing iron ore prices amid China’s weak inflation data and profit-taking further pressured the weak mining sentiment. Mining majors BHP, Rio Tinto and Fortescue declined 1.2%, 2% and 2.4%, respectively.
Technology stocks tracked Wall Street higher, adding 0.4%.
New Zealand’s benchmark S&P/NZX 50 index closed 0.2% higher to 13,276.24 points.
(Reporting by Kumar Tanishk in Bengaluru; Editing by Janane Venkatraman)
