Australian shares rise on rate cut hopes; CBA hits fresh record
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More news: The Australian sharemarket has opened higher despite a weak lead from Wall Street as local investors focus on a likely second rate cut this year by the Reserve Bank later on Tuesday.
The benchmark S&P/ASX 200 index was up 61.60 points or 0.74% to 8,356.70 after the first half hour of trade, led by gains in the heavyweight financials sector as well as technology shares.
Each of the Big Four banks, which could see increased lending amid lower interest rates, were trading more than 1% higher, with CBA shares hitting a fresh record of $173.54. Tech sector gains were led by a 12% jump in TechnologyOne after it delivered record first-half profit and lifted profit guidance.
Top miners BHP, Rio Tinto and Fortescue were each trading in the green, while energy majors Woodside and Santos were also up nearly 1% each.
The local gains come ahead of the RBA interest rate decision at 2.30pm AEST. Earlier, all three major US stock indices finished barely higher, rebounding from declines earlier in the session.
Australian shares to start higher ahead of RBA rate decision
The news: The Australian sharemarket is set to open higher following a nearly flat finish on Wall Street, and ahead of a likely rate cut decision by the Reserve Bank later on Tuesday.
The numbers: Updated at 7.25am AEDT:
- ASX futures: up 73 points or 0.88% at 8,384 points
- Wall Street: Dow Jones up 0.32%, S&P 500 up 0.09%, Nasdaq up 0.02%
- Europe: FTSE 100 up 0.17%, CAC 40 down 0.04%, DAX up 0.70%
- Spot gold: up 0.01% at USD3,229.61 per ounce
- Oil prices: Brent up 0.12% to USD65.49/bbl, US WTI up 0.32% to USD62.69/bbl
- AUD: down 0.02% at 64.56 US cents
- Bitcoin: down 1.16% to USD105,200.90.
The context: All three major US stock indices finished in the green, rebounding from declines earlier in the session as market sentiment was weakened by the downgrade of the US government's perfect sovereign credit rating due to its huge debt profile. For local investors though, the focus will be on a likely second rate cut by the RBA on Tuesday, as well as comments on the Australian economy.
What to watch: RBA interest rate decision at 2.30pm AEST; earnings from Tower Ltd, TechnologyOne and Vodafone; and annual general meeting for Viva Energy at 2:00pm.
