The share market and Australian dollar got a boost from the Reserve Bank of Australia’s decision to hold rates steady, as it pointed to an expected pick-up in mining exports.
The benchmark S&P/ASX200 closed 0.11 per cent higher at 5,621.9 points on Tuesday after trading in negative territory for most of the session.
Gains by large industrial stocks and the resources sector offset falls in financials and energy companies.
The resource and consumer staples indexes lifted after the RBA said increases in mining exports and a pick-up in consumption will support a return to reasonable economic growth after a drop in the September quarter.
CommSec market analyst Steven Daghlian said the RBA does not seem keen to cut rates, taking a neutral stance.
“However, they’ve become a little bit more optimistic perhaps on the global economy; they haven’t changed much in relation to their expectations on inflation nor housing,” he said.
The Australian dollar also got a boost, trading at 76.80 US cents at 1700 AEDT.
Attention now turns to RBA governor Philip Lowe’s first speech of the year at an economics forum in Sydney on Thursday night, and the RBA’s quarterly Statement on Monetary Policy on Friday, Mr Daghlian said.
“They’re going to be two things I think economists will be paying close attention to.”
Toll roads operator Transurban found support among investors after posting a 42 per cent jump in half year net profit, thanks to increased toll revenue across its Sydney, Melbourne and Brisbane motorways.
The stock gained 66 cents, or 6.4 per cent, to $11.04.
Macquarie Group led the financial sector lower after failing to impress investors with its quarterly trading update, Mr Daghlian said.
Macquarie forecast a steady profit for its fiscal year, and its shares dropped $1.19, or 1.4 per cent, to $82.75.
Westpac, Commonwealth Bank, National Australia Bank and ANZ all slipped slightly.
ON THE ASX:
* The benchmark S&P/ASX200 gained 6.3 points, or 0.11 per cent, to 5,621.9 points.
* The broader All Ordinaries index added 7.2 points, or 0.13 per cent, to 5,672.6 points.
* The March SPI200 futures contract was up seven points at 5,572 points, with 32,256 contracts traded.
* National turnover was 3.6 billion securities traded worth $6.2 billion.
CURRENCY UPDATE AT 1700 AEDT:
* 76.80 US cents, from 76.64 US cents on Monday
* 85.88 Japanese yen, from 86.28 yen
* 71.68 euro cents, from 71.13 euro cents
* 61.60 British pence, from 61.36 pence
* 104.30 New Zealand cents, from 104.77 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,233.96 per fine ounce,
up $US10.46 from $US1,223.50 on Monday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 5.25 per cent March 2019, 1.8pct, from 1.825pct
* CGS 4.25pct April 2026, 2.632pct, from 2.704pct
Sydney Futures Exchange prices:
* March 2017 10-year bond futures contract at 97.27 (implying a yield of
2.73pct), from 97.205 (2.795pct) on Monday
* March 2017 3-year bond futures contract at 98.04 (1.96pct), from 98.02
(1.98pct).
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
