The Australian share market has made a strong start to the new financial year ahead of a crucial Reserve Bank interest rate decision.
The benchmark S&P/ASX200 index on Monday finished up 42.8 points, or 0.59 per cent, to 7,226.6, while the broader All Ordinaries rose 41.2 points, or 0.56 per cent, to 7,442.7.
The local bourse built on a strong lead from Wall Street on Friday night, buoyed by the release of softer-than-expected inflation data, IG markets analyst Tony Sycamore said.
After trading mostly flat over the past three months, he expects the index to stay relatively subdued for the rest of 2023.
"Balancing out the headwinds of elevated inflation, higher interest rates, and slowing growth against the tailwinds of expected China stimulus, we look for the ASX200 to finish the year at 7350," he said.
Traders will be keeping a close eye on this week's key economic event - Tuesday’s Reserve Bank board meeting.
"We expect the RBA to raise rates by 25 basis points to 4.35 per cent in what will be another close call," Mr Sycamore said.
"The probability of an RBA rate hike on Tuesday sits at 35 per cent, however another hike is almost fully priced for August."
Other commentators differed, with JPMorgan analysts Ben Jarman, Tom Kennedy and Jack Stinson expecting the RBA to put rates on hold.
"The board surprised the market in recent meetings and while this suggests further uncertainty going into the decision, we take recent official commentary at face value," they said.
Nine of the 11 official ASX sectors were in the green, with only tech and healthcare stocks sliding.
Consumer discretionaries climbed 1.4 per cent, showing hopes of an RBA rate pause remain high.
Miners and energy stocks did most of the heavy lifting, up 1.1 and 0.8 per cent respectively.
Of the big miners BHP was up 0.6 per cent, Rio Tinto gained 0.7 per cent and Fortescue recovered from a negative start to finish 0.4 per cent higher.
In a lustrous day for the goldminers, Newcrest climbed 2.5 per cent and Northern Star jumped 3.6 per cent.
Pilbara Minerals soared 3.5 per cent after the lithium miner said it is advancing a mid-stream demonstration plant in development with environmental technology company Calix.
Coal miner Yancoal was up 3.0 per cent while gas giant Santos firmed 1.3 per cent.
Information technology stocks defied a positive lead from the tech-heavy Nasdaq to plunge 1.5 per cent after the sector finished the previous week up 4.5 per cent.
Logistics software company WiseTech fell 2.9 per cent to $77.46, while Xero retreated 0.9 per cent after founder Rod Drury announced his resignation from the board.
Nuix was one bright spot, with the data analytics software developer jumping 7.1 per cent on news it had sealed the acquisition of US workflow automation company Rampiva.
The big banks all gained with NAB climbing 0.1 per cent, Westpac rising 0.4 per cent, CBA advancing 0.7 per cent and ANZ finishing the day 0.8 per cent higher.
Downer EDI rose 2.7 per cent to $4.22 after sealing a road maintenance contract with a New Zealand council, valued at up to $540 million over a maximum 10-year term.
Chemicals distributor Redox dropped 5.1 per cent to $2.42 after listing on the ASX at $2.55 per share in the year's biggest IPO to date.
United Malt shares surged 8.6 per cent after the brewing ingredients producer was bought by French giant Malteries Soufflet at a 45 per cent premium of $5 a share.
Lumos shareholders have instantly found themselves a whole lot richer after the US Food and Drug Administration approved the medical diagnostics developer to market its FebriDX testing device.
Its share price went stratospheric at the news, up 564 per cent.
The Australian dollar started the week up against its US counterpart, buying 66.63 US cents, from 66.30 at Friday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Monday up 42.8 points, or 0.59 per cent, at 7,246.1.
* The broader All Ordinaries rose 41.2 points, or 0.56 per cent, to 7,442.7.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.63 US cents, from 66.30 US cents at Wednesday’s ASX close
* 96.34 Japanese yen, from 95.92 Japanese yen
* 61.11 Euro cents, from 60.99 Euro cents
* 52.50 British pence, from 52.51 pence
* 108.48 NZ cents, from 108.84 NZ cents.
