Australian shares close higher for third straight day; inflation data in focus

By Reuters Newsan hour ago Updated

By Aamir Khalid

Oct 27 (Reuters) - Australian shares closed higher on Tuesday for a third straight session as miners rallied following firmer copper prices, while investors positioned themselves ahead of key inflation data due the next day and next week's interest-rate decision.

The benchmark S&P/ASX 200 index .AXJO ended 0.5% higher at 8,850.10 points, its largest single-day gain since October 16.

The benchmark has been range bound in the last few sessions, oscillating between the 8,700 and 8,850 levels.

"There is a lack of direction as we are outside the Australian reporting season...(this) will continue until at least we get some clarity from the Reserve Bank of Australia," said Craig Sidney, senior investment adviser at Shaw and Partners.

Wednesday's quarterly inflation data will give market participants clues on the Reserve Bank of Australia's (RBA) interest-rate decision due next week.

Inflation coming in materially above the central bank's 2%–3% target range would strengthen the case for a fifth rate hike this year.

Markets imply a more than 62% chance that the RBA will raise rates on November 3. 0#AUDIRPR

Sidney said the upcoming bank reporting season, kicking off next week, would provide important catalysts for the market.

Financials .AXFJ slipped 0.6%, tempering gains in the mining sub-index. All the "Big Four" banks traded in the red. Westpac WBC.AX will unveil its annual results next Monday, opening the bank reporting season.

Miners .AXMM jumped 2.9% in their best session in more than a week, as copper prices firmed on a stock market rally and demand strength in China. MET/L

Gold miners .AXGD gained 1.5% with Northern Star Resources NST.AX and Evolution Mining EVN.AX adding more than 1% each.

Energy stocks .AXEJ rose 0.6%, with sector majors Woodside Energy WDS.AX and Santos STO.AX up 0.3% and 0.1% respectively.

The New Zealand benchmark S&P/NZX 50 index .NZ50 fell 0.4% to 13,680.27 points. The Reserve Bank of New Zealand is scheduled to announce its cash rate decision on Wednesday with markets anticipating a 25 bps hike to 3.0%.