Australia shares race to 11-year high on rate cut expectations, NZ up
* NZ shares at record high
* Inflation figure boosts Aussie benchmark
* Aussie dollar drops 0.9 pct in the wake of CPI data
(Updates milestones, price action, recasts, adds inflation
By Mensholong Lepcha
April 24 (Reuters) - Australian shares rose to a more than
11-year peak on Wednesday after data showed inflation slowed
sharply last quarter, boosting expectations of a rate cut this
The S&P/ASX 200 index gained as much as 1.1 percent
to 6,390.50 by 0250 GMT, with volumes expected to remain
comparatively lower throughout the session ahead of a public
holiday on Thursday. The benchmark added 1 percent on Tuesday.
The headline consumer price index (CPI) was flat in the
March quarter, below forecasts for a 0.2 percent increase and
the lowest since a negative reading in early 2016.
The muted figure comes after the Reserve Bank of Australia
(RBA) said earlier this month that if inflation failed to
accelerate as desired and unemployment were to suddenly trend
higher, then rates would need to be cut from an already record
low of 1.5 percent.
"Australian inflation shows no signs of coming anywhere near
the central point of the RBA's 2-3 percent range, and we are
biting the bullet and changing our 'on-hold' call for the RBA to
a cut, possibly as early as the 7 May meeting," said ING
Economics in a research note.
"...we can't now see how the RBA can ignore such a bad
inflation miss, even with last week's strong employment gains."
While stocks cheered the data, it pushed the Australian
dollar 0.9 percent weaker against the greenback.
The currency has been in a downward trend since late March
after the country's central bank abandoned its long-standing
neutral bias to say its next move in interest rates was likely
Export-reliant stocks, such as index-heavyweight drug
manufacturer CSL Ltd climbed more than 3 percent to its
biggest one-day gain since late December.
Financials gained with the Big Four banks, ranging
from top lender Commonwealth Bank of Australia to No. 4 lender
National Australia Bank, up more than 1 percent each.
The Big Four banks are due to announce earnings next week.
Technology stocks rose as much as 2.6 percent, in
line with Wall Street gains overnight, to hit an all-time high.
Better-than-expected earnings saw the S&P 500 index
and the Nasdaq register record closing highs on Tuesday.
Computershare Ltd and Afterpay Touch Group
gained as much as 2.2 percent and 4 percent, respectively.
New Zealand's benchmark S&P/NZX 50 index was trading
at its highest level on record, up 0.7 percent at 10,070.10.
Heavyweight a2 Milk Company rose 1.9 percent, while
flag carrier Air New Zealand was up 1.5 percent.
For more individual stocks activity click on
(Reporting by Mensholong Lepcha
Editing by Jacqueline Wong)
First Published: 2019-04-24 03:28:18
Updated 2019-04-24 05:29:05
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.