Australian equities gain on tech boost, set for marginal weekly gain

Australian shares experienced a slight increase on Friday, buoyed by the performance of financial and technology companies amid market indifference towards the anticipated interest rate hike. The S&P/ASX 200 index rose by 0.3%, closing at 9,068.90 points as the clock struck 0058 GMT. The index had dropped by 1% on the previous day.

Fears of prolonged higher interest rates, driven by overheated inflation numbers and expectations of an imminent rate increase at the upcoming central bank meeting, dampened the index's earlier gains, setting the stage for a modest weekly increase of approximately 0.1%.

Market participants now estimate over a 50% probability of a September interest rate hike by the Reserve Bank of Australia, a significant shift from the 16% probability prior to Wednesday's inflation release. Financial institutions and technology firms led the market gains, with financials and real estate stocks dipping marginally.

The "big four" Australian banks saw gains ranging between 0.5% and 0.8%. Technology stocks soared by up to 5.2%, marking their best day in a month, following Nvidia's optimistic revenue forecast and solidifying the positive outlook for the AI boom. Healthcare stocks also enjoyed gains of up to 1%, while the energy sub-index saw a moderate increase of around 1%, driven by robust crude oil prices.

Companies like Santos and Woodside Energy surged by more than 1%. However, consumer staples stocks fell by 0.8%, with Wesfarmers shedding 0.3%, continuing its downward trend for a second consecutive day following a disappointing report on consumer spending. Virgin Australia shares were volatile in early trading after the airline announced better-than-expected full-year earnings and projected a 3% reduction in domestic capacity to stimulate revenue growth.

New Zealand's benchmark S&P/NZX 50 index similarly climbed 0.2%, reaching 13,916.69 points. Air New Zealand's stock surged by as much as 3.9%, the carrier's best performance since August 3, after reporting a smaller-than-expected annual loss.