The Australian share market has closed higher as US President Donald Trump’s move to repeal “Obamacare” appeared to help clear the way for him to start tackling tax reform, which markets have been waiting for.
Republicans in the US have unveiled their plan for dismantling former President Barack Obama’s health care law by scaling back the government’s role in helping people afford medical coverage.
“When the news came through that the Republicans had brought the bill to the Congress around the repeal of Obamacare, it (the market) took off,” IG market strategist Evan Lucas said.
“The general belief as to why the market is optimistic about it is that it clears another hurdle that he (President Trump) wants to get over before he starts getting on with his tax reform policy that he’s been championing.”
On the local bourse the heavyweight banking sector lifted slightly, but resources stocks were mixed.
The big four banks were up slightly, led by Westpac, as Commonwealth Bank boss Ian Narev and ANZ chief executive Shayne Elliott appeared before a parliamentary committee in Canberra on Tuesday.
An overnight fall of $US2 in the iron ore price weighed on major miners BHP Billiton and Rio Tinto.
BHP Billiton was 25 cents, or 0.97 per cent, lower at $25.50, and Rio Tinto was down by 52 cents, or 0.84 per cent, at $61.61.
Vaccines and blood products supplier CSL, which has significant exposure to the US market, was up $1.26 to $121.49.
Ardent Lesiure was six cents, or 3.9 per cent higher at $1.615 after the theme parks operator said visitor numbers to its Dreamworld facility on the Gold Coast had improved in February, as patrons slowly return following the death of people people on a ride last year.
The Australian dollar spiked against the US dollar after the Reserve Bank of Australia held its benchmark interest rate steady, striking an upbeat tone about the growth outlook.
Mr Lucas said the Australian dollar lifted because the chance of an interest rate cut in Australia now looked less likely, and the market was now pricing in a 60 per cent chance of a rate hike in the next 12 to 18 months rather than a cut.
The Aussie dollar was at 76.16 US cents at 1700 AEDT, up from 75.81 US cents on Monday.
ON THE ASX:
* On Tuesday, the benchmark S&P/ASX200 was up 14.9 points, or 0.26 per cent, at 5,761.4 points.
* The broader All Ordinaries index was up 13.4 points, or 0.23 per cent, at 5,801.9 points.
* The March SPI200 futures contract was up 26 points, or 0.45 per cent, at 5,754 points.
* National turnover was 3.01 billion securities worth $6.1 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 76.16 US cents, from 75.81 US cents on Monday
* 86.765 Japanese yen, from 86.30 yen
* 71.95 Euro cents, from 71.48 cents
* 62.22 British pence, from 61.69 pence
* 108.75 New Zealand cents, from 108.11 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,225.40 per fine ounce, down $US7.89 from $US1,233.29 on Monday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 5.25pct March 2019,1.848pct, from 1.830 pct
* CGS 4.25pct April 2026, 2.7677pct, from 2.757pct
Sydney Futures Exchange prices:
* March 2017 10-year bond futures contract at 97.145 (implying a yield of 2.855pct), from 97.165 (2.835pct) on Monday
* March 2017 3-year bond futures contract at 97.93 (2.07pct), from 97.95 (2.05pct)
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
