Australian shares closed higher on Friday, tracking Wall Street markets as investors cheered Thursday's rate cut decision.
The S&P/ASX 200 rose 0.3% or 28.3 points to close at 8,773.5.
Wall Street markets hit record highs overnight after the Federal Reserve cut its interest rate by 25 basis points and assured two more cuts later during the year, according to a report by Westpac Banking (ASX:WBC, NZE:WBC).
"US equities hit record highs overnight as yesterday's rate cut from the Fed and confirmation there is more to come supported risk sentiment," said Harry Ottley, Economist at Commonwealth Bank of Australia (ASX:CBA).
On the domestic front, higher household spending, strong job gains, rising house prices, an improved Purchasing Managers' Index, growing gross domestic product, along with an increase in employment, have boosted National Australia Bank's (ASX:NAB) confidence in its forecast of a gradual pickup in the country's economic growth, the bank said.
The Australian labor market is softening again, with a lower-than-expected employment growth rate in August, Westpac said.
The Federal Reserve's rate cut decision is likely to have a milder impact on commodities than before, with gold expected to outperform early in the cycle as investors flock to safe-haven assets, while supply-side constraints may cause oil and base metals to lag until economic activity improves, analysts said.
In company news, Rio Tinto Group (ASX:RIO) is expected to cut as many as 30 of the 90 managing director roles that fall below the company's nine-person executive team. Shares of the company fell nearly 1% at market close.
Shares of Insignia Financial (ASX:IFL) were flat at market close, after the Finance Sector Union said in a Thursday statement that the company will restructure its advice enablement and advice technology divisions.
Lastly, Santos (ASX:STO) lost AU$3 billion in its market value after a consortium led by XRG, a unit of the Abu Dhabi National Oil Company, withdrew its non-binding proposal to acquire the company for $5.626 per share in cash, via a scheme of arrangement, according to a report by Bloomberg. Shares of the company rose nearly 1% at market close.
