Australia Market closes at all time high

Headline indices of the Australia share market closed at a new record high on Tuesday, 30 July 2019, as risk sentiments improved, partly thanks to very low interest rates globally, impressive gains in commodity prices and the Federal Election. Most of ASX sectors inclined, with market rally supported by buoyant materials, financials, Utilities, and communications shares. Information technology and consumer discretionary underperformed. At closing bell, the benchmark S&P/ASX200 index inclined 19.30 points, or 0.28%, to 6,845.10, a record high for the first time since 1 November 2007. Meanwhile the broader All Ordinaries index, which tracks the nation's 500 biggest listed companies, rose 16.86 points, or 0.24%, to end the session at 6,928.30.

The Bank of Japan kept monetary policy steady on Tuesday but said in its policy statement that it will not hesitate to take additional easing measures if the economy loses momentum toward achieving the target interest rate of 2%. The moves came after the European Central Bank last week signaled a potential rate cut and more monetary easing ahead. Also, Bank of Japan statement comes ahead of the U.S. Federal Reserve's monetary policy decision on Wednesday stateside, where the central bank is widely expected to cut its benchmark lending rate for the first time since 2008 by 25 basis points.

 

The US-China trade talks resume in Shanghai today, around three months after similar talks collapsed. While the market's expectations seem to be relatively low, any progress would likely be well received by the market.

The crude oil price rose by 1.2% or 67c to US$56.87 per barrel last night. Ongoing US-Iran tensions and the possibility of US stockpiles easing for a seventh consecutive week helped. While the iron ore price fell overnight, the metal has surged by more than 60% Year to Date partly due to concerns of lower supply. Rio Tinto (RIO) was up 0.7% ahead of its half year earnings due this Thursday.

Gold miner Northern Star (NST) was down despite the sale of a record amount of gold between April and June from its mines in WA. The cost of producing each ounce of the precious metal was slightly higher than the US$1225 - $1275 range flagged by the company at US$1296/oz.

Crown Resorts ended the day 1.9% lower at A$12.03 after the Federal Government confirmed it would launch an inquiry into Crown Casino operations.

ECONOMIC NEWS: Australia Building Approvals Fall In June -- Australia's building approvals fell 1.2% month-on-month in June, confounding expectations for an increase of 0.2%, data from the Australian Bureau of Statistics revealed Tuesday. Approvals for private sector houses rose 0.4%, while that for private sector dwellings excluding houses decreased 6.5%. On a yearly basis, building approvals plunged 25.6% compared to the expected fall of 24.3%.

CURRENCY NEWS: The Australian dollar eased against greenback. The Australian dollar was changed hands at $0.6902 following declines from levels above $0.702 seen last week.

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