Aust shares rally after Fed chair hints rate hikes over

The local share market has rallied to a nearly two-week high in relief this morning after Federal Reserve chairman Jerome Powell hinted the powerful US central bank may be done with its aggressive rate-hiking cycle.

At lunchtime AEDT on Thursday, the benchmark S&P/ASX200 index was up 82.3 points, or 1.2 per cent, to 6,920.6, while the broader All Ordinaries was up 87.9 points, or 1.25 per cent, to 7,112.5.

The Fed kept US interest rates on hold for a second meeting, as was widely expected, but Mr Powell’s comments during a press briefing were taken as more dovish than anticipated.

“The question we’re asking is: should we hike more?” Mr Powell told reporters. “Slowing down is giving us, I think, a better sense of how much more we need to do, if we need to do more.”

J.P.Morgan economists said in a note that the Fed chairman also seemed comfortable with the progress being made towards its inflation target and was sanguine about the stance of a broad array of inflation expectations.

US 10-year Treasury yields slipped 19 basis points to a two-week low of 4.73 per cent while Wall Street had its best session in more than two weeks.

At midday the ASX200 was on track for its best session since a 1.3 per cent gain on September 15, with nine of 11 sectors in the green.

Tech was the biggest gainer, up 3.7 per cent, followed by property at 3.1 per cent.

The utilities sector was down 2.3 per cent as Origin Energy’s potential acquisition by a private equity consortium hit the rocks following opposition from its largest shareholder.

Origin Energy shares were down 4.2 per cent to $8.685 after AustralianSuper said Brookfield and EIG Partners’s revised “best and highest” bid of $9.531 per share wasn’t acceptable.

Elsewhere, all of the Big Four banks were higher, with ANZ climbing 2.5 per cent, Westpac adding 2.1 per cent, NAB up 1.9 per cent and CBA trading 1.6 per cent higher.

BHP and Rio Tinto had both advanced 1.0 per cent, while Fortescue had added 1.3 per cent.