Australian shares edged higher on Friday, but posted their first weekly decline in three, while markets revised expectations of a rate change after top central banker reiterated that the Reserve Bank of Australia has not ruled out another hike.
The S&P/ASX 200 index closed 0.1% higher at 7,642.8 points, but lost 0.7% for the week.
RBA Governor Michele Bullock warned there was still some way to go to meet the mid-point of the inflation target range of 2% of 3%, despite encouraging signs of moderation, and also warned that rates might have to rise again.
UBS analysts now expect the RBA’s first cut in November from their earlier expectations of a cut in August, noting that the central bank has been more hawkish than expected.
Healthcare stocks gained most on Friday, rising 1% to an eight-month high.
Shares of biotech giant CSL climbed 0.6%, while hearing implants maker Cochlear rose 5.9% to touch an all-time high.
Financial stocks ended marginally higher, with Commonwealth Bank of Australia (CBA) adding 0.3%. National Australia Bank lost 0.3%.
Boral touched a record high after the construction material maker forecast upbeat annual earnings.
Australia shares extend gains on boost from banking, tech stocks
Miners lost 3.3% this week, with heavyweights BHP Group and Fortescue down 0.3% and 0.8%, respectively. Energy stocks fell 1.3% and gold stocks retreated 0.7%.
Tony Sycamore, market analyst at IG Australia, expects the Australian stock markets to fare better in the near term with the Chinese stock market closed for Lunar New Year holidays.
Considering the recent headwinds from China, the market close gives local investors the opportunity to focus on corporate earnings and employment data due next week, Sycamore said.