Australian shares were higher at noon on Tuesday as a lower Aussie dollar helped to offset some of the relentless pressure stemming from US-driven trade war concerns, with A2 Milk Company leading the way for consumer firms.
The benchmark S&P/ASX 200 index was up 26.6 points, or 0.4 per cent, to 6,204.4 points by 1200 AEST, while the broader All Ordinaries was up 25.5 points, or 0.4 per cent, at 6,298.8 points.
Financials picked up a little, hours ahead of the Reserve Bank of Australia’s policy meeting, where the RBA board is likely to hold rates at record lows.
That was countered somewhat by selling in material stocks amid weaker raw material prices, as investors fretted about the economic impact of China’s bitter trade dispute with the United States.
The S&P/ASX 200 Consumer Staple index climbed 1.3 percent, after Synlait Milk extended a supply deal with A2 Milk Company Ltd by two years for a2 Platinum infant formula and other nutritional products.
A2 Milk Company shares rose 4.4 per cent.
The gains spilled over into other milk product makers like Blackmores and Bellamy’s Australia, which added as much as 1.3 per cent and 3.4 per cent, respectively.
Healthcare stocks, which earn a substantial portion of their income in the United States and benefit from a weaker Aussie dollar, were the second biggest contributors to overall gains.
The Aussie dollar once again slipped to recent lows as global trade tensions manifested into weaker Chinese asset prices.
“The growth stocks are having a bounce because they were sold down in the last week and with the tech stocks bouncing in the United States, there is a bit of growth appetite coming back to the market,” said Mathan Somasundaram, a Blue Ocean Equities market portfolio strategist.
Index heavyweight biotherapeutics company CSL Ltd, climbed 1.7 per cent to an over one week high.
Ahead of the RBA rates meeting, the big four banks were all trading in positive territory, with Commonwealth Bank leading the way, rising as much as 1 per cent.
ANZ was up as much as 0.7 per cent, having sustained two-sessions of heavy losses after it warned of continued difficult trading conditions in the foreseeable future.
In the materials space, BHP and Rio Tinto both fell as much as 1.8 per cent, pressured as copper prices hit seven-month lows on Monday.
Chinese steel and iron ore futures dropped after data pointed to slower factory growth in China last month.