Australian shares have rallied on Thursday, tracking overnight Wall Street gains after the US Federal Reserve chairman said the central bank could slow its pace of interest rate hikes "as soon as December".
Mr Powell's words appeared to soothe investors who were fearing a more hawkish statement even as Mr Powell warned the fight against inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.
"The market is taking this glass-half-full, it could've been worse approach. Powell didn't really say anything that new," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in Charlotte, North Carolina.
"The path of least resistance since the last inflation number has been higher. There's momentum to the upside in place until something outright stops it," Mr Samana said.
"Policy continues to tighten. People are just not appreciating it," he added, noting that even if the Fed were to pause rate hikes it is still shrinking the balance sheet, which he sees as "almost as important if not more important than the level of rates."
The Dow Jones Industrial Average rose 737.24 points, or 2.18 per cent, to 34,589.77, the S&P 500 gained 122.48 points, or 3.09 per cent, to 4,080.11 and the Nasdaq Composite added 484.22 points, or 4.41 per cent, to 11,468.00.
ASX hits seven-month high
Back home, the ASX 200 closed up 70 points or 1 per cent to 7,354.
By 04:15pm AEDT, the Australian dollar was up 0.4 per cent to 68.12 US cents.
Most sectors finished the session higher, but academic, energy and healthcare sectors ended lower.
Ramelius and Block were the top performers, gaining 10.5 per cent and 7.4 per cent respectively.
Shares of Medibank rose 1.7 per cent after the private health insurer confirming that more stolen customer data has been released on the dark web, amid reports the hackers have released all files remaining in their possession.
Domino's Pizza said it would raise $165 million to fund the acquisition of its Germany-based joint venture that it owns with Domino's Pizza Group.
Real estate stocks rose 1 per cent. It comes after new data shows that national house prices have fallen in November but the pace of decline has slowed.
Gold stocks soared 3.9 per cent, making them one of the top percentage gainers on the bourse, as gold prices rose over Powell's comments.
Newcrest Mining and Northern Star Resources were up 4.3 per cent and 3 per cent, respectively.
However, HMC Capital plunged 7.3 per cent, NEXTDC lost 3.9 per cent and Downer EDI shed 2.3 per cent.
EU stocks logs best month since July
Oil prices rallied on Wednesday on signs of tighter supply, a weaker US dollar and optimism about a potential recovery of demand in China.
Brent crude oil was down, trading at $US86.77 a barrel, by 04:25pm AEDT.
Meanwhile, European stocks closed higher on Wednesday and registered its second straight month of gains after cooler euro zone inflation data bolstered case for smaller rate hikes by the European Central Bank.
The pan-European index rose 0.6 per cent to end November with a 6.8 per cent gain, its best monthly performance since July.
ABC/Reuters
