Australia Market gains 0.6%, lead by financial and material stocks

Headline indices of the Australia stock market closed higher on Tuesday, 24 July 2018, as most sectors recovered from a sluggish start to the week, thanks to Chinese government signal to shift to a loser fiscal policy to shield the world second largest economy from the worsening trade row with Washington. Almost all ASX sectors inclined, with shares of materials, financials, consumer staples, consumer discretionary, industrial and technology issues being notable gainers. The benchmark S&P/ASX 200 Index inclined 38.24 points, or 0.61%, to 6,265.80. The broader All Ordinaries Index grew 35.11 points, or 0.56%, to 6,355.20.

China is looking to adopt more vigorous fiscal policy, and is looking at potential tax cuts for Chinese businesses, helping to drive Asia markets higher for Tuesday. After more than a year of pushing a crackdown on dangerous debt levels in the financial system, Premier Li Keqiang said the government's "fiscal policy should be more active", according to an announcement late Monday by the State Council, or Cabinet. Li also stressed the government would accelerate plans to reduce taxes by more than 1.1 trillion yuan ($160 billion) and to issue 1.35 trillion yuan in local government special bonds for infrastructure.

 

Shares of materials and resources were key contributor to the index rally, with BHP Billiton, Fortescue Metals and Rio Tinto inclining in a range of 1% to 2%.

Shares of financial companies were also higher, with 'Big Four' banks ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac were up in a range of 0.5% to 1.5%.

In companies news, online retailer Kogan slumped to a seven-month low, after disappointing investors with a fourth-quarter cashflow and trading update.

Ansell shares closed at three-year highs after UBS increased their 12 month price target for the company to A$27.45 up from A$25, citing macro trends, such as higher manufacturing in the United States, which drives demand for industrial gloves and protective clothing. About half of Ansell's revenue comes from the United States, where the number of manufacturing employees has risen from about 12.4 million last June to nearly 12.7 million this year.

CURRENCY NEWS: The Australian dollar was down against the U.S. dollar on Tuesday. The Australian dollar was at 73.88 US cents, down sharply from 74.16 US cents on Monday.

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