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Aussie share are lifting for a second day and have hit fresh 11.5 year highs at lunch, with the ASX 200 index up 66pts or 1 per cent to 6635.4. A strong lead from Wall Street, encouraging signs for the US-China trade dispute and firmer commodity prices are boosting sentiment.
Last night, President Trump said he “had a very good telephone conversation” with China’s leader President Xi and that they will have “an extended meeting next week at the G20 [summit] in Japan”. This settled some concerns that both leaders might not meet.
Mining and energy stocks are the best performers at lunch thanks to a big lift in oil and iron ore prices. Iron ore hit a fresh five-year high, lifting by 3.5 per cent or $3.80 to US$112/t on supply concerns. Fortescue Metals (FMG) – a pure iron ore producer which tends to standout when the metal price surges – is up 4.2 per cent. Rio Tinto (RIO) and the more diversified BHP are both up by more than 2 percent.
Banks are also contributing to the improvements. The RBA cut the cash rate for the first time in close to three years earlier this month and the market is becoming more convinced of further rate cuts in coming months. The prospect of lower rates and the possibility of this boosting lending is helping. The big four banks are up as much as 1 per cent.
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Property group, GPT is in a trading halt as it conducts an $800m capital raising to help pay for more commercial property in Sydney’s Darling Harbour. GPT aims to raise its stake in the Darling Park 1 and 2 office complex together with the Cockle Bay Wharf development.
The number of skilled internet job vacancies fell by 0.7 per cent in May after sliding by 1.6 per cent in April. Vacancies have fallen for 5 straight months and continue to highlight a sluggish labour market. The market is pricing in a 50 per cent chance of an RBA rate cut in July and 80 per cent likelihood of a drop in August.
The Australian dollar buys US$0.6876 and remains near a 3.5 year low partly due to lower interest rates.
1.5bn shares have changed hands so far on Wednesday worth an above average $3bn. 641 stocks are up, 429 down and 394 are unchanged.
Published by CommSec
