ASX 200 Rises for Third Day as Property Stocks Rebound Despite Consumer Sentiment Plunge After RBA Hike

SYDNEY — Australian shares rose for a third straight session on Tuesday, led by a rebound in battered property stocks and gains in miners, even as a closely watched survey showed consumer confidence collapsing after the Reserve Bank of Australia's latest interest rate hike.

The S&P/ASX 200 index closed up 49.3 points, or 0.57%, at 8,735.7. The benchmark has now gained about 1.4% over three sessions, recovering a large part of last Thursday's nearly 2% selloff, which had sent the index to a four-month low.

The broader market also advanced. The ASX 50 gained 0.71%, while the resources index climbed 0.84%.

The index opened higher after a strong session on Wall Street, where gains in megacap technology stocks pushed the Nasdaq to a record high overnight, even as U.S. bond yields climbed to their highest levels in more than two decades.

Property bounces off multi-year lows

Real estate was the best-performing sector, finishing 1.11% higher after three straight losing sessions.

The sector had fallen to its lowest level since January 2024 on Monday, with the S&P/ASX 200 Real Estate index down about 18% so far this year. Most of that decline has come in the past two months as rising bond yields weighed on property valuations.

Arena REIT, Growthpoint Properties Australia, HomeCo Daily Needs REIT, Stockland, Region Group and Charter Hall Retail REIT were among the sector's biggest gainers, rising roughly 3% to 4% during the session.

The rebound came despite a lack of a clear catalyst. Australia's 10-year government bond yield, which fell as much as 5 basis points early in the day, reversed course to trade slightly higher at about 5.41%.

Materials rose 0.91%, utilities gained 0.90% and financials added 0.73%. Health care rose 0.63%, while consumer discretionary, energy, telecommunications and industrials also finished higher.

Miners and aluminium lift resources

Alcoa was among the top performers on the ASX 200, rising more than 4% as aluminium prices snapped a five-day losing streak and climbed to about $3,215 a ton.

Mining giants BHP and Rio Tinto each gained around 1%, while South32 rose about 1.6%. Copper miners posted more modest gains despite a rise in copper prices, with rising bond yields and a firmer U.S. dollar weighing on sentiment.

Lithium stocks recovered after a difficult stretch. PLS Group and Liontown rose more than 3% early in the session, while gold miner Capricorn Metals also advanced.

Retailer Metcash and payments company Block were also among the gainers, along with energy retailer AGL Energy.

Defense and tech stocks retreat

Defense-related stocks fell as investors took profits after strong recent gains.

Codan dropped nearly 4% after rallying about 30% last week. Electro Optic Systems fell more than 3%, while DroneShield lost about 2.5%.

Technology stocks were also weaker. WiseTech Global slipped about 2% after rising 6.6% on Friday, while Megaport, Life360 and Pro Medicus also declined. Atlas Arteria, Harvey Norman, Mesoblast and Hub24 were among other decliners.

Elevra Lithium fell despite gains across most of the lithium sector.

Consumer confidence collapses

The market's gains came despite grim news about Australian households.

The Westpac-Melbourne Institute Consumer Sentiment Index fell 4.7% to 80.4 in October from 84.4 in September, one of the weakest readings in the survey's five-decade history. Any reading below 100 indicates that pessimists outnumber optimists.

The survey straddled last week's RBA decision to raise its cash rate by 25 basis points to 4.6%, the highest level since 2011. Responses collected after the hike were dramatically weaker, falling to 67.2 from 86.9 before the decision.

"The sentiment read across the 40% surveyed after the RBA decision came in at just 67.2, an alarmingly weak read that, for complete surveys, has only been registered during the depths of the early 1990s recession," Westpac senior economist Matthew Hassan wrote.

Households are also struggling with fuel prices above 2.30 Australian dollars a liter, up nearly 25% this year as the conflict involving Iran disrupts energy supplies.

Expectations for mortgage rates jumped, with more than 80% of respondents surveyed after the hike expecting further increases. An index measuring whether it is a good time to buy a major household item fell 7.1% to 83, about 40 points below its long-run average. Unemployment expectations also rose.

Despite the slump in confidence, Westpac said it still expects the RBA to raise rates again at its Nov. 2-3 meeting, citing rising fuel costs feeding into broader inflation and demand linked to the artificial intelligence and data center boom.

Company news

EQ Resources reported record quarterly revenue of 158.8 million Australian dollars, up 101% from the previous quarter, as tungsten production and prices surged. Its cash balance nearly tripled to 82.3 million Australian dollars. The stock briefly rose more than 6% before reversing to trade lower.

IT distributor Dicker Data entered a trading halt ahead of an announcement on a proposed material acquisition. Trading is expected to resume by Thursday.

L1 Global Long Short Fund launched an entitlement offer to raise up to about 483 million Australian dollars, with L1 Capital saying recent market volatility had created "numerous investment opportunities."

Engineering company Civmec said it had won more than 220 million Australian dollars in new contracts, including construction of Alcoa's gallium plant in Western Australia.

Investors also continued to focus on the upcoming listing of AI infrastructure company Firmus Technologies, which is on track to become one of the largest floats in ASX history.

Global backdrop

Oil prices steadied after a two-day decline. Brent crude settled at about $100.32 a barrel Monday, while West Texas Intermediate traded near $89 after Saudi Aramco cut its prices for Asian buyers to a six-year low.

Aramco CEO Amin Nasser warned that global oil stockpiles remain dangerously low and said "pressure at both ends of the barrel will intensify" until the Strait of Hormuz fully reopens.

In the United States, the 10-year Treasury yield hit 5.35% overnight, its highest since April 2002, as strong services data kept expectations of a Federal Reserve rate hike alive. Investors are awaiting minutes from the Fed's September meeting later this week.

Outlook

Analysts said the rally had the feel of a relief bounce, with rising global bond yields still clouding the outlook for stocks. Investors will watch for further economic data and corporate updates as the market looks to recover the rest of last week's losses.