The Australian share market has closed higher after Tuesday’s release of the minutes of the Reserve Bank of Australia’s last board meeting boosted investors’ expectations of an interest rate cut in August.
CMC chief market strategist Ric Spooner said better-than-expected company earnings reports from the US were also boosting sentiment.
The Australian share market had risen for eight consecutive sessions before easing on Tuesday, but resumed an upward course on Wednesday.
Mr Spooner said most sectors of the market rose on Wednesday except for mining stocks.
“I think the Reserve Bank minutes of yesterday have had a bit to do with this,” Mr Spooner said.
“I think the market has a heightened expectation that we will see another rate cut in Australia in August and that’s basically helping to push everything up
.”Also, the US profit-reporting season is doing pretty well, although it’s early days.”
Mr Spooner said that on the negative side, a stronger US dollar had helped push down commodity prices, which had hurt mining stocks.
Also, investors were wondering if there can be any more uplift in the price of iron ore despite reasonably good production reports from miners BHP Billiton on Wednesday and Rio Tinto on Tuesday.
In the resources sector, BHP Billiton fell 58 cents to $19.25. BHP Billiton, which released its full year figures, is hoping to lift iron ore production in Western Australia this financial year after narrowly missing its target for 2015/16, following the Samarco mine disaster in Brazil and the impact of bad weather.
Rio Tinto lost 99 cents to $48.00, and Fortescue Metals was off six cents at $4.00.
Among the major banks, Westpac lifted 36 cents to $30.38, National Australia Bank was up 16 cents at $26.11, ANZ climbed 24 cents to $25.23, and Commonwealth Bank added 74 cents to $76.76.
Among other stocks, construction and contract mining giant CIMIC plunged $6.33, or 19.01 per cent, to $26.96 as analysts raised concerns about the company’s cash flow in the wake of the company’s half-year results, released on Tuesday night.
And sleep apnoea device maker Oventus soared 25 cents, or 35.71 per cent, to 95 cents a day after listing on the ASX, as prominent investor Alex Waislitz’s TIGA Trading boosted its stake in the market debutante.
KEY FACTS:
* The benchmark S&P/ASX 200 index was up 37.4 points, or 0.69 per cent, at 5,488.7 points.
* The broader All Ordinaries index was up 32 points, or 0.58 per cent, at 5,565.9 points.
* The September share price index futures contract was up 39 points at 5,449 points, with 30,108 contracts traded.
* National turnover was 2.87 billion securities traded, worth $5.67 billion.
