Australian shares break four-week losing run on bond relief

By Reuters News

By Kumar Tanishk

Oct 2 (Reuters) - Australian shares rallied on Friday, led by heavyweight banks and miners, snapping a four-week losing streak as easing bond yields offered relief after a volatile week for rates.

The S&P/ASX 200 .AXJO ended 0.8% higher at 8,682.10 points after sliding 2% on Thursday. It ended a marginal 0.2% higher for the week, its best performance since the week ended August 28.

Stocks in Sydney initially weathered the Reserve bank of Australia's rate hike and rose on softer inflation data, but a global bond rout and elevated oil prices wiped out those gains as they re-ignited inflation worries.

Easing Australian bond yields supported equities on Friday as investors pared bets on further RBA hikes, although caution persisted ahead of US payrolls data.

Miners .AXMM gained 1.1% on higher copper prices, but posted a fifth straight weekly loss. Giants BHP BHP.AX and Rio Tinto RIO.AX added 1.6% and 1.2% respectively. MET/L

Financials .AXFJ rose 1%, but logged a fourth consecutive weekly decline. The big four gained between 0.5% and 1.6% on the day.

A Reuters analysis of LSEG data over two years to September 2026 showed the ASX 200 benchmark declined 0.3% on average when 10-year yields rose 5 basis points or more, versus a 0.5% average gain when they fell by as much, with mining and real estate stocks swinging the most on average.

Higher yields are a straightforward problem for real estate because they raise borrowing costs, push up capitalisation rates and weigh on valuations, said David Tuckwell, CIO at ETF Shares.

For miners, it is about what rising yields signal for global financial conditions, the US dollar and demand for commodities, Tuckwell added.

Equities are expected to stay volatile and capped until oil and long-end yields stabilise for longer, he said.

Among other shares, technology stocks .AXIJ rose 4.5% to a more than three-week high, tracking higher US stocks. The subindex posted its best week since early August. .N

New Zealand's S&P/NZX 50 .NZ50 slumped 0.9% to 13,680.49 points. The benchmark lost 1% and posted its worst weekly showing since early September.

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