Australian shares are on the rise as sectoral strength offsets the banking slump

Australian shares traded within a narrow range Wednesday as investors held back their risk appetite due to waning expectations for additional monetary policy ease.

S&P/ASX 200 index remained at 8,474.50 as of 2320 GMT but is still down about 7% from its all-time high reached on October 21. The benchmark index ended Tuesday at a low of five months.

Since the Reserve Bank of Australia held interest rates constant earlier this month, the main index has been in a downward trend. A positive jobs report released last week and a high inflation rate published ahead of the November interest rate decision have reinforced expectations that the easing phase is over.

Commonwealth Bank of Australia, the largest lender, fell 0.8%, reaching its lowest level in six months.

CBA's shares hovered at a seven-month low after the lender warned earlier this month of increased competition and lower rates that would bite into its margins.

The other "Big Four banks" traded between 0.6% to 0.9% lower.

The benchmark index was also affected by the technology stocks, which hit their lowest level since April mid. Accounting software maker Xero lost 0.5%.

Investors were looking for signs that the AI boom would continue. The sub-index mirrored the overnight sell-off of its Wall Street counterparts amid concerns about overvaluation.

Iron ore prices are rising on the backs of a resilient short-term demand from China, the world's largest metal consumer.

BHP and Rio Tinto, two major sector players, both advanced by 1.1% and 0.3%.

Oil prices rose, and energy stocks gained 0.7%. Western sanctions on Russian oil supplies weighed on expectations for supply. Woodside Energy and Santos both rose by 1.1% and 0.3% respectively.

The benchmark S&P/NZX 50 Index in New Zealand rose 0.2% to 13,373.62. (Reporting and editing by Sherry Phillips in Bengaluru, Nikita Maria Jio from Bengaluru)

(source: Reuters)