Australian shares rise as banks gain; Woodside tumbles on higher annual costs

Jan 22 (Reuters) - Australian shares rose further on Wednesday, helped by gains in index heavyweight financials, while top independent oil and gas producer Woodside Energy led its peers lower after reporting higher costs and lower revenues for fiscal 2024.

The S&P/ASX 200 index .AXJO rose 0.4% to 8,437.6 by 2346 GMT, after closing 0.7% higher on Tuesday.

Stock markets globally rose overnight following mixed messages from U.S. President Donald Trump's White House on tariffs. MKTS/GLOB

In Australia, investors await fourth-quarter inflation data due on Jan. 29 for cues on the central bank's monetary policy path.

Cooling underlying inflation would cement chances of the Reserve Bank of Australia cutting interest rates next month, according to analysts.

Traders see a 78% probability of a quarter-point rate reduction in February when the central bank meets for the first time this year, according to the RBA Watch Tool.

Banking stocks .AXFJ led the charge with a rise of 0.9%. Top lender Commonwealth Bank of Australia CBA.AX gained 0.6%.

While higher rates are historically beneficial to banks, they slow credit growth and impact borrowers' mortgage paying capacity.

Mining stocks .AXMM dipped 0.9% as investors remained on edge over Trump's tariff plans for top iron ore consumer China. IRONORE/

Sector leaders BHP BHP.AX, Rio Tinto RIO.AX and Fortescue FMG.AX fell 1.4%, 0.4% and 1.3%, respectively.

Energy stocks .AXEJ declined 1.1%, as oil prices fell after Trump declared a national energy emergency in the United States, raising concerns of higher U.S. output. O/R

Woodside Energy WDS.AX topped losses on the sub-index, tumbling as much as 2.6% despite a record annual production.

New Zealand's benchmark S&P/NZX 50 index .NZ50 gained 0.2% to 13,078.56.

Data released by Statistics New Zealand showed inflation in the fourth quarter was stronger than expected. While the annual rate was slightly higher than expected, it was within the central bank's target range of 1%-3%, leaving the door open for further rate cuts.

Traders see a 70.3% chance of a half-point rate cut as early as next month. 0#NZDIRPR

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Subhranshu Sahu)

((Nikita.Jino@thomsonreuters.com;))

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