Australia’s sharemarket advanced on Thursday despite the US Federal Reserve’s decision to raise interest rates for the first time in three years. The benchmark S&P/ASX 200 index gained 35.9 points, or 0.41 percent, closing at 8732.4, while the broader All Ordinaries increased 36.4 points to end the session at 8910.9.
The Australian dollar strengthened against the US currency, trading at 71.17 US cents late in the day. Market gains were primarily driven by strong performances in the financial and healthcare sectors, with four of the 11 sectors posting positive results.
Major banks led the advance, with Commonwealth Bank rising 1.63 percent to $154.01. National Australia Bank saw the largest boost among the lenders, climbing 3.16 percent to $39.22. Westpac and ANZ also posted gains, rising 1.16 percent to $34.83 and 2.08 percent to $37.78, respectively.
In healthcare, CSL maintained its upward momentum, increasing 1.81 percent to $177.56. Pro Medicus jumped 2.37 percent to $169.22, and Sonic Healthcare edged higher by 0.41 percent to $19.62.
Conversely, the energy sector retreated amid a decline in oil prices, which fell to $US106 per barrel from a weekly high near $US110. Woodside Energy lost 0.87 percent, closing at $32.98, Santos declined 1.83 percent to $8.57, and Ampol slipped 0.28 percent to $43.13.
Analysts noted that markets appeared largely unruffled by the Federal Reserve’s rate increase, as it was broadly anticipated by investors. Daniella Hathorn, senior market analyst at Capital.com, highlighted that the move was unanimous among Fed officials and that 16 out of 18 expected at least one additional hike before year-end. Fed Chair Kevin Warsh emphasized ongoing concerns about persistent inflation and the need to prevent further knock-on effects from energy price shocks, despite the Fed’s inability to directly control oil prices.
The Federal Reserve raised the federal funds rate to a range between 3.75 percent and 4 percent. Commonwealth Bank economist Harry Ottley characterized the adjustment as a reduction in monetary accommodation, noting inflation remains too elevated across multiple categories of goods and services over both six- and twelve-month periods.
Investors anticipate at least one more rate increase from the US central bank this year.
In corporate developments, MA Financial shares dropped 2.98 percent to $4.89 following the announcement of a $327.5 million acquisition of a 50 percent stake in a Melbourne shopping centre. Buy now, pay later firm Zip gained 0.45 percent to $2.22 after appointing Sarah Adam-Gedge as an independent non-executive director. Meanwhile, Dyno Nobel shares surged 7.77 percent to $4.16 after an investor day revealed the company remains on track to deliver net profits after tax between $325 million and $340 million in the 2026 financial year.