Australian shares advanced 23 points, or 0.3%, to 8,871 in early trade on Thursday, recovering after a muted close in the previous session. Risk appetite was supported by overnight gains on Wall Street after the Federal Reserve left interest rates unchanged, as widely expected, while investors evaluated another wave of corporate earnings.
On the domestic front, fresh data showed export prices in the third quarter posted their largest increase in three quarters, while import prices unexpectedly declined. However, the upside in equities was limited by stronger-than-forecast inflation in September, which reinforced expectations that the Reserve Bank of Australia will lift the cash rate again next week, following four increases already this year. RBA Governor Michele Bullock has cautioned that inflation may stay elevated for longer than projected in August.
Sector performance was mixed. Financials, energy minerals, and industrial services led the advance, partially offset by weakness in retail, manufacturing, and non-energy minerals. The four major banks gained between 1.2% and 1.8%. Among individual names, Goodman Group rose 3.0%, Challenger Ltd. added 2.0%, and Cochlear Ltd. climbed 1.6%.
