(Reuters) - Australian shares rebounded on Wednesday, with the broader market underpinned by expectations that interest rates may be cut while a fall in the Aussie boosted miners.
Expectations the Reserve Bank of Australia will cut interest rates soon were raised after wage growth stalled last quarter.
The S&P/ASX 200 index rose 0.7% or 44.3 points to 6,284.20 at the close of trade. The benchmark fell 0.9% on Tuesday.
Data from the Australian Bureau of Statistics showed the wage price index rose 0.5% in the three months ended March, unchanged from the December quarter.
However, analysts were of the view that while the wage growth data did build on the case for a rate cut, employment data would paint a more concrete picture of the labour market.
"Does it throw further fuel on the rate cut fire? It does. But it is not the smoking gun for rate cuts by any shape or form," said Chris Weston, head of research at Pepperstone brokerage.
"The RBA has said that the smoking gun to cut rates is the labour market. If we do see that breaking down, and there are signs that that could be the case...one could say that the chance of a June cut could rise," Weston added.
Economists are now focusing on the April jobs report due on Thursday, where the unemployment rate is seen ticking up to 5.1% from 5.0% now.
The prospect of a rate cut and disappointing data from China led investors to dump the Australian dollar sending it to a 4-1/2-month trough, which prompted a strong rally among export-oriented stocks such as miners and healthcare.
Mining stocks surged 1.4%, with the sector's giants BHP Group and rival Rio Tinto rising 1.9% and 2.2%, respectively.
Even gold stocks cut their losses from early in the session, ending only marginally lower. Top miner Newcrest Mining rose 0.4% while Saracen Mineral Holdings gained 1.3%.
Healthcare stocks, which conduct a majority of business overseas, rallied 1.3%, with index heavyweight CSL and Cochlear each adding 1.5%.
Financial firms also rose, with Australia and New Zealand Banking Group putting on 0.7% while National Australia Bank also ticked up.
New Zealand's benchmark S&P/NZX 50 index rose 0.6% or 61.23 points to finish the session at 10,131.58. Earlier in the session, the index hit a record high.
Fletcher Building was among top gainers, rising 2.4%, while dairy giant a2 Milk Company jumped 2.6%.
(Reporting by Rashmi Ashok in Bengaluru; Editing by Jacqueline Wong)
