The local share market has risen for a fourth straight day, buoyed by Chinese stimulus measures in China even as a red-hot domestic jobs report raised expectations for rate hikes, pushing the Australian dollar to a four-month high.
The benchmark S&P/ASX200 index on Thursday finished up 13.6 points, or 0.19 per cent, to 7,175.30, while the broader All Ordinaries gained 15.8 points, or 0.21 per cent, to 7,370.0.
Experts said the May labour market data was much stronger than expected, with the participation rate at a record high of 66.9 per cent, raising the odds the Reserve Bank would raise rates again in July.
The Australian Bureau of Statistics reported employment in May rose by 76,000 - far more than the 17,500 expected - reducing the jobless rate to 3.6 per cent, from 3.7 per cent a month earlier.
Betashares chief economist David Bassanese described it as a "strong surge in employment" that would likely prompt the Reserve Bank to raise rates next month, barring a soft monthly Consumer Price Index report on June 28 or a very soft retail sales report on June 29.
"It’s a case of no more Mr Nice Guy - the RBA wants to inflict some pain on the economy to prick the bubble of complacency around ongoing wage and price pressures," Mr Bassanese wrote.
CommSec chief economist Craig James largely agreed, writing that a rate hike in July now looked like a 50/50 proposition following the employment data report.
IG analyst Tony Sycamore had expected the jobs report to lead to an "almost certain mauling" for the ASX200, but he said the bourse had been saved by China trimming its one-year lending rate as a stimulus measure to revive its economy.
China is going against the grain, with the European Central Bank widely expected to hike rates later on Thursday.
In the pre-dawn hours on Thursday, the Federal Reserve left rates unchanged for the first time since January 2022, as had been expected.
But economists were describing it as a "hawkish skip" or a "hawkish pause" from the Fed's 10 consecutive rate hikes, because the central bank also effectively forecast it would raise rates twice more this year.
The ASX's 11 official sectors finished mixed on Thursday, with seven up and four down.
Health care was the biggest mover, dropping 2.0 per cent as CSL retreated another 2.7 per cent to $279.50 following disappointing 2023/24 earnings guidance released Wednesday.
In the heavyweight materials sector, the big iron ore miners were higher on the China stimulus news while goldminers were under pressure.
BHP gained 0.8 per cent to $46.25, Fortescue Metals climbed 3.6 per cent to $22.48 and Rio Tinto added 1.4 per cent to $117.75.
Newcrest fell 0.7 per cent to $25.89 and Northern Star dropped 1.8 per cent to $12.80 as the price of the price of the yellow metal fell to an almost three-month low of $US1,935 following the prospects of more US rate hikes.
All of the Big Four banks were higher, with ANZ the biggest gainer, climbing 0.9 per cent to $23.13.
CBA and NAB both added 0.6 per cent, to $97.99 and $25.65, while Westpac edged 0.2 per cent higher at $20.60.
The Australian dollar rose above 68 US cents for the first time since February on increased expectations that rates would rise.
The Aussie was buying 68.15 US cents, from 67.84 US cents at Wednesday's ASX close.
Cryptocurrencies were deep in the red, having begun plunging about two hours after the Fed decision.
Bitcoin had fallen below $US25,000 ($A37,000) for the first time since March and Ether was down more than five per cent to a three-month low of $US1,640 ($A2,400).
ON THE ASX:
* The benchmark S&P/ASX200 index finished Thursday up 13.6 points, or 0.19 per cent, at 7,175.30.
* The broader All Ordinaries gained 15.8 points, or 0.21 per cent, to 7,370.0.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 68.15 US cents, from 67.84 US cents at Wecdnesday's ASX close
* 96.28 Japanese yen, from 94.94 Japanese yen
* 62.95 Euro cents, from 62.87 Euro cents
* 53.88 British pence, from 53.76 British pence
* 110.31 NZ cents, from 110.09 NZ cents