Australia Market rebounds on bargain buying

The Australian share market finished session higher on Tuesday, 21 December 2021, as investors bought on dips after stocks fell sharply over the past trading days. Meanwhile, bargain buying was also supported after minutes of the Reserve Bank of Australia's policy meeting showed the board is committed to maintaining highly supportive monetary conditions.

At closing bell, the benchmark S&P/ASX200 was up 62.89 points, or 0.86%, to 7,355.05. The broader All Ordinaries index added 64.47 points, or 0.86%, to 7,666.69.

The top performing stocks in this index were NANOSONICS and ZIP CO., up 7.46% and 5.08% respectively. The bottom performing stocks in this index were PILBARA MINERALS and LIONTOWN RESOURCES, down 9.06% and 4.19% respectively.

 

Total 10 of 11 sectors ended higher along with incline in the S&P/ASX 200 Index. Health Care was the best performing sector, gaining +3.9%, while energy was the worst performing sector, falling 0.37%.

Shares of healthcare sector out-performed the market, with medical diagnostics company Sonic Healthcare closing at a new high of A$45.47. ACL jumped 12.2% after upgrading guidance due to higher COVID testing levels. Cochlear gained 3.9%, Nanosonics gained 7.5%, and Ramsay Health closed 3.1% higher at $70.31.

ECONOMIC NEWS: Omicron Poses Uncertainty But Not Expected To Derail Economic Recovery, Says RBA- The RBA Board decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero% and to continue to purchase government securities at the rate of $4 billion a week until at least mid February 2022. The Board remained committed to maintaining highly supportive monetary conditions to achieve its objectives of a return to full employment and inflation consistent with the target. As previously determined, the Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range. This will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently. This is likely to take some time and the Board is prepared to be patient. The Australian economy was rapidly recovering after the interruption to growth caused by the outbreak of the Delta variant of COVID-19, the Reserve Bank of Australia's (RBA) December meeting minutes showed. "High rates of vaccination and substantial policy support continued to underpin the recovery," it noted, adding that the emergence of the Omicron variant was a new source of uncertainty but it was not expected to derail the recovery.

CURRENCY NEWS: The Australian dollar was at $0.7117, still struggling to recover after last week's decline from above $0.72.

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