Australian shares rise in energy stocks; RBA decision comes into focus

Energy stocks rose more than 1% on Monday as oil prices rallied after top exporter Saudi Arabia pledged to cut output as traders awaited a key interest rate decision from the Reserve Bank of Australia on Tuesday.

The S&P/ASX 200 index was up 1.2% at 7,145.1 by 0040 GMT, after losing 0.1% last week.

Even with inflation above the target range, Australia’s central bank is likely to leave its key interest rate unchanged at 3.85%, according to a Reuters poll of economists divided on when and where interest rates will rise this year.

Global investor sentiment was boosted by hopes that the Federal Reserve will pause rate hikes this month following a mixed US jobs report on Friday.

In Sydney, energy shares rose 1.9% on Saudi Arabia’s plan to further cut oil production from July. Woodside Energy and Santos rose 2.3% and 2% respectively.

“Oil prices could rise after OPEC cut production quotas by 1mb/d over the weekend,” analysts at ANZ wrote in a note.

Miners rose 1.6%, while BHP Group and Rio Tinto gained 2.7% and 2.4% respectively.

The “big four” banks rose between 1% and 1.7%, while financial sector heavyweights rose 1.2%.

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

Meanwhile, gold mine operator Evolution Mining said it had approved expansion plans for its Mungari mine in Western Australia and its Ernest Henry mine in Queensland. Its shares were up 2.3% most recently.

In New Zealand, markets are closed for national holidays. (Reporting by Ayushmann Ojha in Bengaluru; Editing by Subranshu Sahu)

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