Australian shares end higher as miners, gold stocks jump on softer US data
Miners jump 2.5%
Gold stocks up 2%
Santos gains 4.2% on buy-out bids speculation
Updates to close
By Ayushman Ojha
July 4 (Reuters) - Australian shares ended higher on Thursday, led by gains in miners and gold stocks on a weaker U.S. dollar following soft economic data in the United States, which fuelled hopes of the Federal Reserve cutting rates as soon as September.
The S&P/ASX 200 index .AXJO was up 1.2% at 7831.80 points, with most major sectors in positive territory. The benchmark gained 0.3% on Wednesday.
Economic data on Wednesday showed signs of a weakening U.S. labour market, suggesting that the Fed could start cutting rates in September.
U.S. services sector activity also slumped to a four-year low in June, hinting at a loss of momentum in the economy at the end of the second quarter.
The chances of a September U.S. rate cut rose to 74% after the data, from 65%, with markets pricing in 47 basis points of easing this year. FEDWATCH
The start of a rate easing cycle by the Fed could encourage other central banks, such as the Reserve Bank of Australia (RBA), to follow suit.
Investors are, however, waiting for Australia's core consumer price index (CPI) print on July 31 to gauge the central bank's rate outlook, with analysts at Bank of America saying that the RBA could favour a hike if there is a more than 1% rise.
"The RBA has generally declined to hike at or below 1%," they added.
In Sydney, heavyweight miners .AXMM advanced 2.5%, with top miners BHP Group BHP.AX and Rio Tinto RIO.AX gaining 2.6% each.
Gold stocks .AXGD jumped 2% on the day.
Greenback-priced commodities rose after U.S. economic data boosted bets of interest rate cuts by the Federal Reserve and squeezed the dollar.
Financials .AXFJ climbed 1.2%, with the country's top four banksup between 0.9% and 2%.
Energy stocks .AXEJ rose 1.2% as Santos STO.AX added 4.2% after Bloomberg News reported that Saudi Aramco 2223.SE and Abu Dhabi National Oil Company (ADNOC) are exploringbids for the company.
In New Zealand, the benchmark S&P/NZX 50 index .NZ50 fell 0.4% to 11,746.66 points.
Reporting by Ayushman Ojha in Bengaluru; Editing by Sonia Cheema
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