Australian Economy

Australia shares extend gains, Fortescue rallies on founder Forrest’s return

Australian shares closed higher on Wednesday for a fourth straight session, buoyed by sharp gains in mining stocks and a rally in Fortescue Metals Group after its founder Andrew Forrest returned to the helm for an interim period.

The S&P/ASX 200 index ended 1% higher at 7,112.5.

Leading gains on the benchmark, miners added 2.7% to mark their best day since April 28. BHP Group and Champion Iron climbed 3.2% and 5.3%, respectively.

Fortescue jumped 2% after saying billionaire Andrew Forest would takeover the role of executive chairman to oversee its iron ore business for an interim period when Chief Executive Elizabeth Gaines leaves in August.

Wednesday’s strong finish for the ASX 200 has pushed it towards a near-1.5% gain for the week so far.

However, Damian Rooney, director of equity sales at Argonaut warned that the gains may not hold in the near term as investors await key data points, including April unemployment numbers, and as supply chain constraints remain amid geopolitical risks.

Australian Bureau of Statistics’ data showed the country’s wage price index (WPI) rose 0.7% in the March quarter, missing forecasts for a 0.8% increase.

“The pace of wage growth in Q1 will likely temper expectations of a larger rate hike by the Reserve Bank of Australia (RBA) in June,” analysts at Barclays said in a note.

Meanwhile, minutes of RBA’s meeting revealed that the central bank considered hiking rates by 40 basis points, but decided to move by 25 basis points since this would mark a return to “normal operating procedures”.

Among other individual stocks and sectors, technology stocks climbed 1.9, with ASX-listed shares of Block and accounting software producer Xero jumping 3.2% and 2.3%, respectively.

In New Zealand, the benchmark S&P/NZX 50 index snapped a four-day losing streak to end 1.1% higher at 11,137.9.

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