ASX gains on rate optimism; Mining, energy stocks jump, Bitcoin tumbles

Updated June 3, 2026 — 5:58pm,first published June 3, 2026 — 5:15am

The Australian sharemarket powered ahead on Wednesday after a report showed the nation’s economy grew less than expected last quarter, boosting optimism for an interest rate reprieve from the Reserve Bank.

The S&P/ASX 200 finished up 61.3 points, or 0.7 per cent, at 8785.70, with seven of its 11 industry sectors in the green, led by materials. Energy stocks gained as oil climbed for a third day on doubts the US and Iran are close to reaching a peace deal as fresh fighting flared up in the Middle East. The Australian dollar slipped 0.3 per cent to US71.56¢.

G­­­ross domestic product advanced 0.3 per cent in the first three months of the year, the Australian Bureau of Statistics said. That’s about one-third of the pace recorded in the final quarter of 2025 and below economist forecasts, as households hunkered down in the face of higher fuel costs and rate rises. The economy’s 2.5 per cent annual expansion also fell short of forecasts.

The slowdown sparked expectations that the RBA will pause its rate rises at its June 15-16 meeting, having delivered three consecutive hikes to take the cash rate to 4.35 per cent as it tries to rein in inflationary pressures.

“The print confirms our view that the economy is cooling fast enough, and the labour market is starting to feel it. So the RBA’s next move is wait-and-watch, not another hike,” said Sunny Nguyen, head of Australia Economics at Moody’s Analytics. “The next meeting is almost certainly a hold.”

Sharemarkets don’t like rate hikes as they increase borrowing costs for consumers and businesses, which can curtail demand and hurt company profits.

A gauge of demand for Australian government bonds due in seven years surged at auction after the GDP report as investors increasingly bet the RBA is close to ending its rate-hike campaign. Investors sought more than four times the $1 billion of notes maturing in November 2033 on offer, according to data from the Australian Office of Financial Management. The bid-to-cover ratio was the highest for a seven-year bond sale since the same maturity was auctioned in November last year.

Mining stocks jumped higher, with BHP up 2.4 per cent, and Rio Tinto up 1.6 per cent, although Fortescue dropped 1.8 per cent. Northern Star continued to surge, jumping 3.2. It is the second straight day of strong gains for the gold miner, which soared by 13.6 per cent on Tuesday after activist investor Elliott Management revealed it built a $1 billion-plus stake in the company and urged it to put itself up for sale. Evo