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Australian Shares Rise as Banks and Real Estate Stocks Surge; Inflation Data to Influence RBA Decision

Published: October 27, 2025 | Category: Real Estate
Australian Shares Rise as Banks and Real Estate Stocks Surge; Inflation Data to Influence RBA Decision

Australian shares rose on Monday, buoyed by strong performances in banks and real estate stocks, as investors awaited monthly consumer price index figures due later in the week to gauge the Reserve Bank of Australia's (RBA) interest rate trajectory. The S&P/ASX 200 index was up 0.6% at 9,070.50 points by 0001 GMT. The benchmark closed 0.2% lower on Friday.

Australia's third-quarter CPI data, scheduled for release on Wednesday, is expected to play a crucial role in determining whether the RBA will cut its 3.60% cash rate in November. Around mid-October, RBA Governor Michele Bullock indicated that recent readings on home building costs and market services suggested a risk that core inflation might have been higher than anticipated in the third quarter.

Globally, investors are projecting a 25-basis-point rate cut at the conclusion of the U.S. Federal Reserve's monetary policy meeting this week, following a cooler-than-expected inflation report last week. On the local bourse, Australian banks climbed 1.1%, with the 'Big Four' banks rising between 0.8% and 1.3%.

Lower interest rates could potentially spur a strong rebound in mortgage demand and lending, providing a significant boost to both the banking and real estate sectors. The real estate sub-index added 0.5%, led by a 1% rise in Goodman Group. Tech stocks also saw gains, rising 0.8% and following the positive trend from Wall Street on Friday.

Accounting software company Xero and logistics software maker WiseTech Global advanced 0.1% and 0.4%, respectively. However, energy stocks bucked the broader upbeat trend, falling 0.2% as oil prices slipped amid doubts over the U.S. commitment to enforcing sanctions on Russia's two largest oil companies. Energy giant Woodside fell 0.3%.

New Zealand markets are closed for a public holiday.

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Frequently Asked Questions

1. What is the S&P/ASX 200 index, and why is it important?
The S&P/ASX 200 index is a stock market index that tracks the performance of the top 200 companies listed on the Australian Securities Exchange (ASX). It is a key indicator of the overall health of the Australian stock market and economy.
2. How does the Reserve Bank of Australi
(RBA) influence the stock market? A: The RBA influences the stock market through its monetary policy decisions, such as changes in interest rates. Lower interest rates can boost consumer and business spending, which can lead to higher corporate profits and stock prices.
3. Why are real estate stocks performing well in Australia?
Real estate stocks are performing well due to the potential for lower interest rates, which can increase mortgage demand and lending. This, in turn, can lead to higher property values and stronger performance in the real estate sector.
4. What is the significance of the upcoming inflation dat
for the RBA? A: The upcoming inflation data is significant because it will provide insights into the current economic conditions and help the RBA decide on future interest rate policies. Higher inflation could lead to rate hikes, while lower inflation might result in rate cuts.
5. How do global economic factors impact the Australian stock market?
Global economic factors, such as the U.S. Federal Reserve's monetary policy decisions and international trade tensions, can significantly impact the Australian stock market. These factors can influence investor sentiment and the flow of capital into and out of the market.