Australian shares rise on energy boost, Fed decision in focus

Australian shares experienced a slight increase on Wednesday, buoyed by energy stocks buoyed by robust oil prices, as traders kept a close eye on developments in the Middle East and awaited the Federal Reserve's policy announcement. The S&P/ASX 200 index rose 0.3% to 8,699 by 12:03 AM GMT, after falling 0.9% on Tuesday. Crude oil futures fell due to an unexpected surge in US crude inventories, dropping to their lowest level since May 19.

This decline raised concerns among investors that higher oil prices could fuel inflation and prompt central banks to raise interest rates more aggressively. The Federal Reserve is widely expected to raise rates by 25 basis points during its policy decision later on the same day, according to the CME Group's FedWatch tool, a drop from a 59.4% probability a week ago.

Despite this, energy stocks surged by up to 2%, with Santos and Woodside posting gains of 2.2% and 2.6% respectively. Healthcare stocks also gained 0.8%, with CSL hitting its highest level in nearly two weeks. Banks also showed strength, rising by as much as 0.7% after falling 1.1% the previous day. The "Big Four" banks increased between 0.5% and 1.2%.

Mining stocks, however, faced a decline, with the sectoral index reaching its lowest point since early August. Among individual stocks, Reliance Worldwide, a plumbing supplies firm, rose 7.4% to a one-year high after agreeing to a $2.9 billion buyout offer from global investment firm Brookfield. New Zealand's benchmark S&P/NZX 50 index climbed 0.6% to 13,562.85 and was set to mark its best day in two weeks.