Shares of consumer related issues were gaining the most in the benchmark index. A2 Milk (A2M) gained after extending an agreement with Synlait for the supply of milk used in its infant formula products for two years through to July 2023. The gains spilled over into other milk product makers like Blackmores and Bellamy's Australia, which added as much as 1.3% and 3.4%, respectively. JB Hi-Fi, Harvey Norman and Myer were up by at least 1.2%.
Shares in EBOS extended gains for the second day after winning the right to be the exclusive third party distributor of pharmaceutical products to more than 400 Chemist Warehouse/My Chemist stores in Australia for five years from July 2019. EBO expects to generate around $1bn in sales in the first year.
Shares of financials picked up a little, hour ahead of the Reserve Bank of Australia's policy meeting, where the RBA board is likely to hold rates at record lows. The big four banks were all trading in positive territory, with Commonwealth Bank leading the way, rising as much as 1%.
Shares of materials and resources were key drag in the benchmark, after commodity prices took a hit overnight on a firmer US dollar and US-China-European trade tensions. BHP Billiton (BHP), Rio Tinto (RIO) and Fortescue Metals (FMG) were down by as much as 2%.
ECONOMIC NEWS: Australia total number of building approvals issued was down a seasonally adjusted 3.2 percent on month in May coming in at 17,791, the Australian Bureau of Statistics said on Tuesday, following the 5.0 percent decline in April. On a yearly basis, approvals added 3.1 percent, up from 1.9 percent in the previous month.
Australia central bank decided to retain its key interest rate steady at a record low, as weaker currency supports exports amid fears of trade wars. The board of the Reserve Bank of Australia, governed by Philip Lowe, on Tuesday, voted to maintain the cash rate at 1.50 percent. The bank had reduced the rate by 25-basis points each in August and May last year.
CURRENCY NEWS: The Australian dollar lost ground against greenback, falling to the lowest level since January 2017 against the greenback, as global trade tensions manifested into weaker Chinese asset prices. The Australian dollar was trading at 73.39 US cents, down 0.85% from previous day.
OFFSHORE MARKET: U.S. stocks turned higher in the final hour of trading Monday, 02 July 2018, as a rebound in technology shares helped to offset ongoing uncertainty surrounding trade policy. The Dow Jones Industrial Average rose 0.1%. The S&P 500 ended 0.3% higher. The Nasdaq Composite Index gained 0.8%.
COMMODITIES: Crude oil prices rose in Tuesday after declines Monday triggered by U.S. President Donald Trump putting pressure on Saudi Arabia to ramp up oil output.
Crude oil prices declined on Monday as a fall in U.S. supplies at a key delivery hub failed to offset concerns over a ramp up in Russian and Saudi output. Meanwhile a tweet from U.S. President Trump on Saturday, claiming that Saudi Arabia's King Salman had agreed to raise oil output by up to 2 million barrels per day (bpd) also knocked oil prices. On the New York Mercantile Exchange crude futures for August delivery fell 21 cents, to settle at $73.94 a barrel, while on London's Intercontinental Exchange, Brent lost 0.5% to trade at $78.86 a barrel.
Crude oil prices surged to highest level in three and half years in June 2018 as unexpected disruptions in Canada, Libya and Venezuela have raised investor expectations that global oil demand would outstrip supply, keeping oil prices elevated.
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