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Australian shares gain for third straight week on miners, gold boost

08/05/2022 | 03:05am

* Miners, gold stocks lead gains in benchmark index

* RBA flags slower economic growth

* Energy, technology shares top losers on ASX 200

Aug 5 (Reuters) - Australian shares ended higher on Friday and clocked their third straight weekly gain, as mining and gold stocks helped offset investor anxiety over a drawn-out downturn following the central bank's warning on inflation.

The S&P/ASX 200 closed 0.6% higher at 7015.6 points.

Gold stocks led the benchmark higher, jumping as much as 2.8% to scale their highest levels since June 27. The sub-index tracked firmer bullion prices, as a softer dollar and growing recession fears lifted gold's safe-haven appeal.

Sector heavyweights Newcrest Mining and Northern Star Resources climbed 0.5% and 3.4%, respectively.

Iron ore futures rose, with global miners Rio Tinto and Fortescue climbing as much as 2.7%.

Investors appeared to have shed initial fears of an economic slowdown even as the Reserve Bank of Australia cautioned the country's inflation rate could go to a three-decade high.

"The forecasts and further upward revision to inflation suggest that additional tightening is required, with the prudent approach clearly to get to neutral sooner rather than later," analysts from RBC Markets wrote.

Investors in broader markets stayed on the sidelines after the Bank of England warned on Thursday of a potential recession after delivering a half-point rate hike.

"Macroeconomic indicators like price hikes and economic growth have weighed on investor sentiment," said Kunal Sawhney, chief executive officer of Kalkine Group.

Australian energy stocks lost nearly 2.2% and suffered their worst week in six, tracking Brent crude prices lower, with Woodside Energy and Santos falling 1.5% and 0.8%, respectively.

The technology index slipped 1.3%, while financial stocks gained marginally with two of the "Big Four" banks trading in black.

New Zealand's S&P/NZX 50 ended flat at 11,728.5 points.

(Reporting by Archishma Iyer in Bengaluru; Editing by Sherry Jacob-Phillips)

Reuters 2022
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