Upbeat economic guidance reinforces materials: Aus shares close 0.6% higher

Market Reports

by Michael Luu

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The Australian sharemarket’s rally gained strength in the afternoon session from positive sentiment around the RBA’s supportive monetary stance and upbeat economic guidance. Gains by gold and iron miners continued to power materials’ elevation to the top of the sectors’ ladder. Both BHP (ASX:BHP) and Rio Tinto (ASX:RIO) had gained over 2.3 per cent by the close of trade. Energy and Consumer staples joined the top three performers, overpowering the downward pressure by IT.

At the closing bell, the S&P/ASX 200 was 0.56 per cent or 39.10 points higher at 7067.90.

Futures

The Dow Jones futures are pointing to a fall of 30.00 points.
The S&P 500 futures are pointing to a fall of 7.25 points.
The Nasdaq futures are pointing to a fall of 26.00 points.
The SPI futures are pointing to a rise of 34 points when the market next opens.

Economic news

The Reserve Bank of Australia’s easy monetary stance has remained unchanged, as the central bank has stuck with the current official cash rate of 0.1 per cent. The RBA has also upgraded its GDP growth estimate to 4.75 per cent this year. The financial authority has justified the decisions with below-consensus inflation and declining unemployment guidance.

The ABS’ latest data on lending indicators have reflected a 12.7 per cent surge in investment loans and a 0.9 per cent drop in first-home buyers’ loans in March. Lending to investors’ return to pre-pandemic levels is attributable to relaxed monetary conditions and lenient lending policies.

Best and worst performers

The best-performing sector was Materials, up 2.21 per cent. The worst-performing sector was Information Technology, down 1.96 per cent.

The best-performing stock in the S&P/ASX 200 was Ramelius Resources (ASX:RMS), closing 7.90 per cent higher at $1.78. It was followed by shares in Silver Lake Resources (ASX:SLR) and Resolute Mining (ASX:RSG).

The worst-performing stock in the S&P/ASX 200 was Flight Centre Travel Group (ASX:FLT), closing 4.61 per cent lower at $16.14. It was followed by shares in Megaport (ASX:MP1) and NRW Holdings (ASX:NWH).

Asian markets

Japan's Nikkei is closed due to Greenery Day.
Hong Kong's Hang Seng has gained 0.45%.
China's Shanghai Composite is closed due to Labor Day.

Commodities and the dollar

Gold is trading at US$1785.14 an ounce.
Light crude is trading $0.02 lower at US$61.98 a barrel.
One Australian dollar is buying 77.48 US cents.

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