Australian shares rise as energy stocks jump; RBA decision in focus

Australian shares rose more than 1% on Monday, led by energy stocks as oil prices jumped after top exporter Saudi Arabia pledged to cut production, while traders awaited a key rate decision from the Reserve Bank of Australia on Tuesday.

The S&P/ASX 200 index advanced 1.2% to 7,145.1 by 0040 GMT after shedding 0.1% last week.

The Australian central bank is likely to keep its key interest rate unchanged at 3.85% despite inflation staying well above the target range, according to a Reuters poll of economists who were divided on when and where rates would peak this year.

Globally, investor sentiment was boosted by optimism that the Federal Reserve would pause its rate hikes this month after a mixed US jobs report on Friday.

Gold, mining stocks lift Australian shares ahead of RBA decision

In Sydney, energy stocks advanced 1.9% on Saudi Arabia’s plan to deepen oil output cuts from July. Woodside Energy and Santos rose 2.3% and 2%, respectively.

“Oil prices are likely to push higher after OPEC cut production quotas by 1mb/d over the weekend,” analysts at ANZ wrote in a note.

Miners jumped 1.6%, with BHP Group and Rio Tinto rising 2.7% and 2.4%, respectively.

Heavyweight financials were up 1.2%, with the “big four” banks gaining between 1% and 1.7%.

Gold stocks fell 1.8%, with sector majors Newcrest Mining, and Northern Star Resources down 3.5% and 2.1%, respectively.

Meanwhile, gold miner Evolution Mining said it had approved extension projects for its Mungari mine in Western Australia and Ernest Henry mine in Queensland. Its shares were last up 2.3%.

In New Zealand, markets were closed for a public holiday.