The Australian market was buoyed by news of rising consumer confidence following an increase in retail sales in October.
The S&P/ASX200 climbed 50.50 points, or 0.60%, to 8,498.40 points at 10.31am AEDT. Seven of 11 sectors are higher, with information technology rising 0.37% and consumer discretionary up 0.18%. Materials and industrials made modest gains of 0.08% each, while the energy sector edged back 0.09%.
Retail sales rose 0.6% month over month in October, which is above market expectations.
The Australian Bureau of Statistics says the strength was driven by “retailers enticing buyers to spend early with discounting, particularly on discretionary items”.
The ANZ-Roy Morgan Consumer Confidence index jumped nine points in November to 99.8, with both the current and future conditions indexes lifting markedly.
ANZ attributes the rise in retail spending to stage-three tax cuts, cost-of-living relief, and moderating inflation.
“We continue to expect spending growth to recover from here, with near-term strength as price sensitive households participate in end-of-year sales events like Black Friday,” economists Sophia Angala, Madeline Dunk and Catherine Birch say in a research note today (3 December).
Though ANZ says households are going to take some convincing, with inflation expectations rising to 4%.
ANZ economists also adjusted their call on when the Reserve Bank of Australia would start cutting rates, saying they now expect a later shallower easing cycle.
“We have pushed out the start of the RBA’s easing cycle to May 2025 from February 2025. We now also only expect two 25 basis-point rate cuts in total (previously three),” they say.
De Grey Mining (ASX:DEG) investors wound back some of yesterday’s gains, with the takeover target slipping 2.54% to $1.92. The gold explorer was joined by its suitor Northern Star Resources (ASX:NST), which retreated a further 2.77% to $16.13 on Tuesday.
Meanwhile, lithium miner Pilbara Minerals (ASX:PLS) rose 3.09% to $2.51 in early trade.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Unsplash
