Australian shares rose 0.7 per cent to a three-week high today, supported by banks and gains in global miner Rio Tinto after it gave an upbeat outlook on China and cost-cutting pledges.
Australian business spending data showed a fall in planned mining investment for the year ending June 2013, suggesting to some the Reserve Bank of Australia may lower rates again next week after it held fire earlier this month after a cut in October.
"Australian capital expenditure data has increased the chances of a December interest rate cut. The idea that we are nearing a peak in mining investment pushes the focus onto the RBA's ability to shore up our economy," said Ben Taylor, trader at CMC Markets.
The benchmark S&P/ASX 200 index rose 30 points to 4,477.7, according to the latest data, the highest close since Nov 8. The index slipped 0.2 per cent on Wednesday, but is up from a mid-November low of 4,334.3.
Rio rose 0.9 per cent after it said it was cautiously optimistic about a pick-up in growth in China, its biggest customer. Rio said it was aiming to cut more than $5 billion of operating and support costs by the end of 2014.
Rival BHP Billiton, which said on Thursday it is using external advisers to help with succession plans for its chief executive, rose 0.6 per cent to $34.21.
Banks advanced, led by a 1.1 per cent rise in ANZ Banking Group, encouraged by the prospect of a revival in loan takers. Policy makers have said they have considered further rate cuts.
"They should move the cash rate to what they think is going to happen in the future, and the future looks a bit softer," said Matthew Johnson, strategist at UBS.
"The end of the investment boom is in sight and monetary policy needs to get a little bit easier to stimulate other parts of the economy," he said.
Slot machine maker Aristocrat Leisure rallied 6.6 per cent to $3.25 after brokers upgraded the stock following a rise in net profit to $45.5 million in the nine months to Sept. 30, up from $19.9 million a year earlier.
Online job ad site Seek fell 1.2 per cent to $6.60 after Chief Executive Andrew Bassat said there had been a "consistent but gradual decline in total ad volumes" since June 30 and first half sales at Australia and New Zealand operations were expected to be flat from a year earlier.
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