Australia Market closes higher on prospect of more interest rate cuts

The Australian share market advanced for fourth day in a row on Wednesday, 27 November 2019, as the market mood bolstered by Wall Street's record closing highs overnight and prospect of more interest rate cuts after the Reserve Bank of Australia signaled they could fall as low as 0.25 per cent. At closing bell, the benchmark S&P/ASX200 index added 63.07 points, or 0.93%, to 6,850.60, while the broader All Ordinaries grew 60.87 points, or 0.88%, to 6,950.63.

Sentiment was brightened by comments by US President Donald Trump on Tuesday that Washington was in the "final throes" of work on a deal that would defuse a 16-month trade war with Beijing. Trump's optimistic comments came one day after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues.

Adding fuel to the rally was the prospect of a greater number of rate cuts by the Reserve Bank of Australia after governor Philip Lowe said on Tuesday night that 0.25 per cent would be the trigger for the implementation of quantitative easing. This implies the possibility of at least two more rate cuts.

Shares of the major banks were higher with the Commonwealth Bank (CBA) leading the way, up 1.2%. The National Bank (NAB) and ANZ Bank (ANZ) also lifted a touch. However Westpac (WBC) slipped 0.2%. Bank of Queensland has also fallen to its lowest levels since 2013, tumbling another 4.8% after a 5.8% decline on Tuesday.

Harvey Norman (HVN) fell 0.7% as the company board survived a second strike after investors voted against its remuneration report but also did not support a board spill. Earlier HVN released sales growth over the first four months of the financial year with comparable sales growth for Australian franchises remaining modest at 0.4%.

Superannuation and wealth management software provider Bravura which rallied 14 per cent after Goldman Sachs upgraded it to buy from neutral.

CURRENCY NEWS: The Australian dollar, sensitive to shifts in broader risk appetite, eased against greenback. The Australian dollar changed hands at $0.678 after seeing an earlier low of $0.6769.

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