Banks, miners lift Australian shares; traders weigh Fed decison

Australian shares rebounded from losses on Thursday, led by gains in financials and mining stocks, while investors assessed the Federal Reserve's monetary policy decision, which signalled further delays in interest rate cuts.

The S&P/ASX 200 XJO closed around 0.2% higher at 7,587 points. The benchmark lost 1.2% on Wednesday.

The Fed held interest rates steady overnight but said that recent disappointing inflation prints could delay rate cuts.

Investors now await the Reserve Bank of Australia's (RBA) monetary policy decision, due on May 7, for further cues on the domestic rate trajectory.

"We expect no change to the (RBA's) cash rate target and for the policy statement to continue to state that "the Board is not ruling anything in or out", analysts at Citi said.

The RBA governor could say that inflation is declining, but more work needs to be done, they added.

In Sydney, financials XFJ led sectoral gains, rising 0.7%, with the 'Big Four' banks ending between 0.5% and 1.5% higher, despite the National Australia Bank NAB posting a 13% drop in its first-half profit on Thursday.

Miners XXMM gained 0.4% on the back of improving metal prices.

Top miners BHP Group BHP and Fortescue FMG rose 0.1% and 1%, respectively.

Gold stocks XGD advanced 1%, with shares of Northern Star Resources NST, Evolution Mining EVN and St Barbara SBM up between 0.8% and 2%.

In contrast, energy stocks XEJ fell 0.5% after crude oil prices declined more than 3% on Wednesday to a seven-week low.

Sector heavyweights Woodside Energy WDS and Santos STO slipped 1.2% and 0.8%, respectively.

Among other stocks, shares of Woolworths WOW dropped 4.2%, their lowest closing level since May 2020, due to a slowdown in sales in its biggest segment.

Across the Tasman Sea, the New Zealand benchmark S&P/NZX 50 index NZ50G advanced 0.05% to 11,874.04 points.