Australia’s sharemarket had its best session in three months on Tuesday after the Reserve Bank left the cash rate unchanged as widely predicted by economists and traders.
The benchmark S&P/ASX 200 Index climbed 110.9 points, or 1.4 per cent, to 7793.3 at the closing bell, with all 11 sectors recording gains. That’s the best one-day performance since February 2. The All Ordinaries jumped by the same amount.
While the central bank was widely expected to keep the cash rate on hold at a 12-year high of 4.35 per cent, most economists had anticipated the RBA would resume a stronger tightening basis after hotter-than-expected inflation data last month.
The central bank sharply revised its inflation forecast to 3.8 per cent by December from 3.2 per cent, in line with expectations.
A neutral tone
Perpetual’s head of investment strategy Matt Sherwood said equities reacted positively off the more “neutral” tone of communication from the RBA. “It didn’t seem like there was a hawkish echo within the statement,” he added.
The Australian dollar slipped to US66.10¢ from US66.25¢ after the policy decision and bond yields fell.
The big four banks rallied on the day, with index heavyweight Commonwealth Bank jumping 2.1 per cent to $119. National Australia Bank climbed 1 per cent to $34.14 and Westpac added 2.8 per cent to $27.89.
ANZ shares wall earlier losses and finished higher 0.1 per cent to $28.79. That’s despite the bank recording a 7 per cent decline in cash profit at $3.55 billion in its first-half results. It also announced a $2 billion share buyback and declared an interim dividend at 83¢ per share, partially franked at 65 per cent.
Other interest rate sensitive sectors were also in the green, with technology stocks advancing 1.5 per cent. WiseTech increased 2.3 per cent to $96.43 and TechnologyOne added 1.9 per cent to $16.20.
Real estate stocks also advanced, with Stockland advancing 2.9 per cent to $4.58 and Goodman Group climbing 1.2 per cent to $34.38.
But it was the utilities sector that was the best performer on the ASX, rallying 2.8 per cent.
That’s after heavyweight sector AGL Energy jumped 7.4 per cent to $10.01 after the energy provider upgraded its full-year profit guidance. It’s forecasting underlying earnings before interest tax depreciation and amortization to be between the range of $2.12 billion and $2.2 billion for the 2024 financial year.
In commodities, energy stocks tracked a higher oil price after Israel rejected a cease-fire proposal for the Gaza strip. Global benchmark Brent wall an earlier advance but was still pushing toward $US84 a barrel. Woodside Energy increased 1.9 per cent to $27.84 and Ampol rose 1.2 per cent to $36.
BHPwhich accounts for around 10 per cent of the ASX, rallied 1.6 per cent to $43.42.
Stocks in focus
Global agriculture merchant Louis Dreyfus has increased its takeover offer for Namoi Cotton to 67¢ a share, up from a previous 60¢ a share bid. Namoi shares added 1.4 per cent to 73¢.
Share in sims slumped 6.4 per cent to $11.06 after the company issued a major profit warning. Broker RBC Capital said the ASX listed company would miss guidance by 90 per cent.
HMC Capital rallied 6.8 per cent to $6.90 after the alternative asset manager said in a Macquarie conference presentation that its operating earnings per share for financial year 2024 were tracking 21 per cent higher at 40¢.
