SYDNEY, AAP – An impending Reserve Bank decision affecting long term interest rates may have preoccupied share market investors, who were largely restrained on Monday.
The central bank’s monthly meeting on Tuesday has been keenly anticipated and, along with the US Independence Day holiday tonight, may have contributed to negligible moves on the ASX.
While analysts do not expect a change to the record low cash rate of 0.1 per cent, they are more interested in the bank’s position on long term rates.
CommSec market analyst James Tao said the meeting was one investors will pay a lot of attention to.
The RBA will decide whether to move its three-year bond yield target for the same rate from April 2024 to November 2024.
A move to the latter would largely be in keeping with the RBA position that it does not expect to lift the cash rate until 2024.
However most analysts expect the RBA will continue buying the April 2024 bond and give itself an earlier opportunity to raise rates.
Mr Tao said this would mean the RBA viewed the economy as performing well and not in need of all the support the central bank is providing.
The Commonwealth Bank, which runs CommSec, recently forecast rates to rise next year due to a strong Australian economy.
On the ASX, a surge in Sydney Airport shares following a takeover offer helped the market close little changed.
Shares in the airport closed higher by 33.91 per cent to $7.78 after a $22.3 billion offer from infrastructure investors.
Industrials shares closed up 4.93 per cent as a result, and helped steady the indices.
Energy shares were better by 2.03 per cent, but there were losses for financials (0.45 per cent) and healthcare (0.65 per cent).
The benchmark S&P/ASX200 index closed up 6.4 points, or 0.09 per cent, to 7315.
The All Ordinaries closed higher by 1.9 points, or 0.03 per cent, to 7589.
Wall Street scaled new highs on Friday.
Jobs data for June showed robust hiring yet persistent weakness in the labour market that will keep the Federal Reserve from raising interest rates soon.
The three major US indices – the S&P, Dow and Nasdaq – closed at record highs.
In Australia, people in Sydney and surrounding regions are enduring their second week of a coronavirus lockdown.
Another 35 people have been infected with COVID-19 in New South Wales, according to Monday’s update.
Tabcorp will spin off its lotteries and Keno arm as a separate ASX-listed business and stopped short of selling its wagering operation.
The company said the demerger of lotteries was the fastest and most effective way to benefit shareholders.
The board has also chosen not to sell its wagering and media arm, which includes the TAB betting outlets and Sky racing TV and radio networks.
This was despite several suitors offering to pay about $3.5 billion.
Shares closed down 4.42 per cent to $4.97.
Meanwhile BetMakers Technology Group, which in May tried to buy Tabcorp’s wagering business, said the two were discussing overseas opportunities.
The company said it also completed buying tote provider Sportech.
Shares were up 2.39 per cent to $1.07.
Some of the big energy providers were doing well.
Woodside was higher by 2.83 per cent to $23.60. Santos gained 1.96 per cent to $7.27.
The big four banks were all lower by less than one per cent.
The big miners were mixed. BHP lost 0.21 per cent to $48.45. Fortescue gained 0.47 per cent to $23.69. Rio Tinto edged up 0.33 per cent to $126.13.
The Australian dollar was buying 75.20 US cents at 1726 AEST, higher from 74.64 US cents at Friday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 6.4 points, or 0.09 per cent, to 7315 on Monday.
* The All Ordinaries closed higher by 1.9 points, or 0.03 per cent, to 7589.
* At 1726 AEST, the SPI200 futures index was lower by six points, or 0.08 per cent, to 7223.
One Australian dollar buys:
* 74.20 US cents, from 74.64 cents on Friday
* 83.50 Japanese yen, from 83.24 yen
* 63.43 Euro cents, from 63.06 cents
* 54.36 British pence, from 54.21 pence
* 107.08 NZ cents, from 107.15 cents.