* NAB economists join growing pool of analysts seeing Oct rate cut
* Energy sector best performer
* Wealth manager IOOF top gainer on benchmark (Updates to close)
By Nikhil Subba
Sept 23 (Reuters) - Australian shares rose on Monday, as hopes of an interest rate cut by the central bank at its October meeting firmed up following last week’s dismal domestic unemployment data.
The S&P/ASX 200 index rose 0.3%, or 18.9 points, to close at 6,749.70. The benchmark ended up 0.2% on Friday.
Investors have their focus on the Sept. 24 dinner speech by Reserve Bank of Australia (RBA) Governor Philip Lowe, for any hints on the timing of the October policy easing, which may further shape market expectations.
Financial futures now predict a 76% chance of a rate cut by the RBA to 0.75% at its Oct. 1 policy meeting, after the country’s jobless rate worsened to a one-year high of 5.3% in August. Prior to the data, the probability stood at 50-50.
Further cementing the case, economists at National Australia Bank on Friday became the latest to join a growing pool of analysts predicting a third interest rate cut by the country’s central bank in October, citing slowing economic growth and a smaller chance of fiscal support.
“The low interest rate environment generally fosters more investment into equities and has helped give the Aussie market a bit of a boost in the past few sessions,” said James Tao, market analyst at CommSec.
The Australian energy index gained 0.7% at close, lifted by higher oil prices, with industry heavyweight Woodside Petroleum rising 1%, and Oil Search finishing up 1.1%.
Financials were buouyed by IOOF Holdings’ 12% gain, after brokerage Macquarie upgraded the wealth manager to “outperform” from a “neutral” rating, following the Melbourne-based company’s win in the landmark case against Australia’s banking watchdog on Friday.
Two of the “Big Four” banks ended the session in the positive territory.
The mining index logged in a 0.2% gain at close, as China steel futures edged up, rebounding from a two-week low on tightening supply. The subindex also benefitted from higher iron ore prices.
The world’s largest miners BHP Group and Rio Tinto both ended marginally higher.
Across the Tasman sea, New Zealand’s benchmark S&P/NZX 50 index ended up 0.4%, or 43.9 points, at 10,873.33, buoyed by energy and industrial stocks.
Auckland International Airport rose almost 2% and was the top gainer on the New Zealand benchmark, followed by telecommunications company Spark New Zealand which ended about 1.8% higher.
Reporting by Nikhil Subba, Rashmi Ashok and Shreya Mariam Job in Bengaluru; Editing by Rashmi Aich