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Australian shares rose 0.8% to 8848.7, snapping a three-day losing streak as global risk appetite improved.
Markets largely ignored the hotter jobs print (65,200 jobs added, unemployment 4.1%) and instead chased cyclicals.
Energy and banks led gains, with Santos up 5.3% and major lenders rebounding strongly.
“While such a shift in rate expectations would typically weigh on the ASX 200, the market brushed it off today like water off a duck’s back,” said IG market analyst Tony Sycamore.
Investor sentiment lifted after Donald Trump signalled tariffs on European allies would not proceed, easing fears of a fresh trade shock.
The shift triggered a rotation out of defensives such as gold and into growth-linked sectors, mirroring rallies across Europe and Wall Street.