The Aussie market is continuing to improve on Wednesday with the possibility on lower interest rates helping boost shares. This follows on from a strong rally on Wall Street overnight as the US Fed signalled an openness to cutting US interest rates and the RBA cutting official rates by 0.25% yesterday, the first move since August of 2016.
The ASX 200 is lifting by 41 points or 0.65% to 6373 with the majority of sectors in positive territory. Financials are the main driver of improvements with the big four banks lifting by as much as 1.4%. The tech sector is seeing the largest percentage improvement so far today as growth stocks lead gains. Afterpay Touch (APT) and Wisetech Global (WTC) are climbing at least 3.5%. Industrials and energy names are also among the major advancers.
Defensive names are underperforming the broader market with gold stocks and real estate weaker. Miners of the precious metal are among the biggest decliners, Evolution Mining (EVN) is down 5.3% with Northern Star (NST) 2.2% weaker. Telcos are also softer with Vocus Group (VOC) slumping 19% on an announcement that a potential $3.27 billion takeover by Swedish private equity firm, EQT Infrastructure, have ceased after the firm conducted its due diligence.
Infant formula makers are also improving after suffering heavy losses over recent sessions on news that China is considering the increase of locally produced baby milk powder sold in China. Bubs Australia (BUB) has jumped 9.3% and is making up a large portion of its 16% loss over the first two sessions of the week. The a2 milk Company (A2M) is 2.7% higher while Bellamy’s Australia (BAL) is up 0.25%.
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On the economic front, the March Quarter GDP numbers have come in mostly in line with the market expectations. The local economy grew at a rate of 0.4% over the quarter compared to expectations of 0.5% while the annual rate of growth came in at 1.8%. This signals the slowest pace of growth since September of 2009 as US-China trade tensions weigh on global growth and domestic consumer spending remains weak. Despite this, the Aussie Dollar has firmed slightly to 70.01 US cents as the USD eases on possible lower US rates.
So far, 1.6b units have traded worth $2.4b with 624 stocks higher, 354 lower and 352 unchanged.
Published by CommSec