Australia Market edges higher

Headline indices of the Australia stock market were edge higher on Tuesday, 31 July 2018, shrugging off weak offshore lead, with shares of energy, materials and financials being notable gainers. However, market gain was limited on caution ahead of monetary policy decisions from the Bank of Japan's and the Federal Reserve's this week. Around late afternoon, the benchmark S&P/ASX 200 Index rose 11.81 points, or 0.2%, to 6,290.20. The broader All Ordinaries Index added 8.13 points, or 0.13%, to 6,376.90.

Overnight in Wall Street, the Nasdaq plunged to its lowest close in more than three weeks, as technology stocks staged a retreat, particularly the so-called FAANG names. The Dow Jones Industrial Average fell 144 points, or 0.6%, to 25,307. The S&P 500 gave up 16 points, 0.6%, to 2,803. The Nasdaq Composite Index shed 107 points, or 1.4%, to 7,630, marking the lowest close for the benchmark since 5 July.

Investors are closely watching outcome of the Bank of Japan's two-day meeting later today, with widespread speculation about whether the central bank may be looking to alter its ultra-loose monetary policy. Speculation that the BoJ will dial back its easing also saw yields on Japanese Government Bonds tick up overnight. Other government bond yields edged higher too. Japan's central bank will likely consider taking steps to make its massive stimulus programme more sustainable, such as allowing greater swings in interest rates and widening its stock-buying selection, according to sources..

The US Federal Reserve meets on Tuesday and Wednesday and is widely expected to stand pat while reaffirming the outlook for further gradual rate rises. The market is almost fully priced for a hike in September and leaning toward a further move before year-end.

Shares of banks and financial companies also contributed to the index's gain, with 'Big Four' ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac - were up in a range of 0.5% to 0.9%. Macquarie (MQG) was remains under pressure after news of a leadership change.

Shares of materials sectors were up, with BHP Billiton (BHP) being the single biggest contributor to the gains today, lifting by 1.5% after Australia's largest miner announced plans to sell its underperforming US shale business for around A$14.5bn last week. It also said it anticipates returning the proceeds to shareholders.

CURRENCY NEWS: The Australian dollar was up against greenback and other major currencies after data showing a far better-than-expected 6.4% lift in local housing construction approvals for June. The Australian dollar was trading at 74.23 US cents at noon, up from 73.93 US cents on Monday.

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