Miners, energy stocks hold Australian benchmark close at 2-month high

Australian shares rose slightly to a two-month closing high on Wednesday, as heavyweight miners and energy stocks rebounded on stronger commodity prices, while sharp declines in major banks capped advances.

The S&P/ASX 200 ended up 0.14% at 8,820.60 points, its strongest close since November 10 last year. The mining sub-index jumped 0.9% to its highest closing point, with copper prices moving in line with a record high score. Top miners BHP and Rio Tinto rose 1.1% and 0.8% respectively.

Gold miners also closed higher as bullion prices hit lifetime highs.

Local shares of top gold producer Newmont Corp advanced more than 2% to hit new highs, while local producers Northern Star Resources and Evolution Mining added 1.4% and 0.7% respectively.

However, financials fell 0.7%, led lower by all the “Big Four” banks. Australia’s top lender Commonwealth Bank fell 1.3% to its lowest level since mid-December last year. Other top banks shed between 0.3% and 1.1%.

Banks continue to face selling pressure amid expectations of a hike in key cash rates this year, said Craig Sidney, senior investment adviser at Shaw & Partners. Rich valuations and a realignment of the monetary policy path in the wake of sticky inflation have fueled a rotation out of the banking sector in the past few weeks.

“There’s definitely some money going into the likes of BHP and Rio Tinto,” Sydney said. The swap shows a 27% chance the Reserve Bank of Australia will raise the cash rate by a quarter point to 3.6% when it meets on February 3.

Energy stocks gained 2.3%, with Santos and Woodside Energy up about 3%.

In New Zealand, the benchmark S&P/NZX 50 index closed up 0.7% at 13,757.71 points.