At closing bell, the benchmark S&P/ASX200 index was up 33.13 points, or 0.44%, to 7,490.40. The broader All Ordinaries index added 36.28 points, or 0.47%, to 7,710.47.
Total 7 of 11 sectors ended higher along with the S&P/ASX 200 Index. A-REIT was the best performing sector, gaining 1.82%, followed by information Technology (up 1.32%), and materials (up 1.26%) while industrials and financials were worst performing sector, erasing 0.26%.
The top performing stocks in S&P/ASX200 index were BREVILLE GROUP and BLOCK INC., up 7.54% and 5.70% respectively. The bottom performing stocks in S&P/ASX200 index were TELIX PHARMACEUTICAL and IMUGENE, down 3.5% and 3.2% respectively.
Shares of real estate sector climbed to a five-month high as buyers bet the cost of borrowing is nearing a top. The recoveries have come as investors anticipate a top in the current rates cycle in the next few months. The Australian interest rate market is 60% priced for a 25bp interest rate hike at February's Board meeting, which would take the cash rate to 3.35%.
Shares of big four banks all suffered losses as a survey from National Australia Bank showed its index of business conditions fell 8 points to +12 in December and after a note from Macquarie, titled The last (upgrade) Jedi, spoke unfavourably about the banks' outlook for the year. CBA, ANZ, NAB and Westpac all finished in the red, down 0.5%, 1.2%, 0.5% and 1% respectively. Macquarie Group finished 1.3% higher.
Among individual stocks, BHP finished 0.6% higher after it struck a new deal to explore for copper in Serbia as it accelerates efforts to boost its exposure to metals that will be vital to building electric cars and green energy technology.
Myer Holdings surged 5.3% after the department store posted its strongest sales in almost 20 months in the five months ended December 31.
ECONOMIC NEWS: National Australia Bank's monthly business survey showed worsened business conditions for December with a reading of 12 points, a decline from November's print of 20 points. The survey reflects deteriorated trading conditions, profitability, and employment, NAB said. Meanwhile, business confidence in December rose by 3 points to -1, an improved reading from -4 points seen in November.
Australia Manufacturing Sector Dips Into Contraction- The manufacturing sector in Australia slipped into contraction territory in January, the latest survey from Judo Bank revealed on Tuesday with a 32-month low manufacturing PMI score of 49.8. That's down from 50.2 in December and it falls beneath the boom-or-bust line of 50 that separates expansion from contraction.
Manufacturing output shrank at the start of 2023, attributed by panelists to both weaker demand and supply constraints. Higher interest rates and a deterioration in global economic conditions were reported by survey respondents to have led to lower new orders, including a drop in new export orders.
The survey also showed that Australia's services PMI improved to a three-month high of 48.3, up from 47.3 in December. The composite index also hit a three-month high by improving to 48.2 from 47.5.
Lower output was recorded at the start of 2023, attributed to both softer service activity and lower manufacturing production. The rates of contraction diverged between the two, however, with service sector contraction easing on better demand while manufacturing output shrank faster amid lower new business and supply issues. Overall new orders rose for the first time since September 2022, underpinned by better service sector performance.
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