ASX gains, dollar dips on RBA minutes
The Australian share market has rallied and the dollar has dipped after it was revealed the Reserve Bank gave serious thought earlier this month to cutting rates for a fourth time this year.
The benchmark S&P/ASX200 index finished Tuesday up 47.4 points, or 0.7 per cent, to 6,814.2 points, while the broader All Ordinaries gained 42.4 points, or 0.62 per cent, to 6,914.1 points.
"Much better day than we were expecting this morning," said CMC Markets chief market strategist Michael McCarthy.
"All indications were that we were in for - at best - a fairly flat day."
That started to change in late morning, after the RBA released minutes from its November 5 board meeting showing board members acknowledging there was a compelling case for cutting the cash rate to a new record low
Ultimately they left it unchanged at 0.75 per cent but the minutes could be seen as bolstering the odds of a December or February rate cut.
"All-in-all, further rate cuts from the RBA is starting to look like a sure-thing - the question is becoming one of timing," said IG market analyst Kyle Rodda wrote in a note to analysts.
Mr McCarthy said that trading volumes were light, however, which could indicate a lack of commitment.
"It does look like without any negative news, some people are willing to jump back in," he said.
A2 Milk helped drive the market after the Kiwi dairy producer upgraded its full-year outlook on strong China and US campaigns, rising 11.2 per cent to a two-month closing high of $13.37 and pulling the consumer staples sector 1.5 per cent higher.
A2 Milk was the biggest contributor to the day's gains behind CSL, Australia's second-largest listed company, which rose 0.8 per cent to $274.27.
New Zealand wholesale broadband provider Chorus was the second-biggest ASX200 gainer, rising 6.9 per cent to $5.26 after the country's Commerce Commission released draft regulations on the company's revenue cap from 2022 to the end of 2024.
All sectors were up save tech stocks, which dropped 1.2 per cent, dragged in part by WiseTech Global after the logistics software company reaffirmed its guidance for the year.
WiseTech shares, which have been battered in recent weeks by allegations made by an overseas short seller, dropped 7.7 per cent to $26.65.
Elsewhere in the sector, Afterpay Touch dropped 2.8 per cent, Xero rose 0.9 per cent and ex-dividend Technology One fell 4.6 per cent.
The big banks were mostly higher, with ANZ gaining 0.5 per cent to $25.42 and Commonwealth and Westpac both up 0.4 per cent, to $80.67 and $26.55, respectively.
NAB dropped 0.2 per cent to $27.26.
In the mining sector, Fortescue Metals gained 2.7 per cent to $9.29, while Rio Tinto gained 0.9 per cent to $95.20 and BHP advanced 0.3 per cent to $37.47.
Defensive sectors did better as another rate cut increased their yield appeal, with the property sector rising 1.3 per cent and bond proxy stocks Transurban and Sydney Airport rising 1.4 per cent and 0.9 per cent, respectively.
Kogan fell 6.6 per cent to $7.09 after chief executive Ruslan Kogan told internet retailer's annual general meeting that gross sales in October were up 18 per cent, with gross profit up 22 per cent.
The Aussie dollar fell to a three-day low of 67.86 US cents after the release of the RBA minutes before recovering slightly, buying 67.98 US cents, from 68.11 US cents on Monday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed up 47.4 points, or 0.7 per cent, to 6,814.2 points
* The All Ordinaries closed up 42.4 points, or 0.62 per cent, to 6,914.1 points.
* The SPI200 futures index closed up 46 points, or 0.68 per cent, to 6,821.
CURRENCY SNAPSHOT AT 1630 AEDT
One Australian dollar buys:
* 67.98 US cents, from 68.11 US cents on Monday
* 73.83 Japanese yen, from 74.12 yen
* 61.39 euro cents, from 61.58 cents
* 52.46 British pence, from 52.69 pence
* 106.32 NZ cents, from 106.44 cents.
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