Australia Market extends gain on US-China trade optimism, ECB stimulus

Headline indices of the Australia share market were higher on Friday, 13 September 2019, as investors cheered a massive stimulus programme from the European central bank, hints of progress in the U.S.-China trade dispute, and increasing expectations of the U.S. Federal Reserve interest rate cut. At closing bell, the benchmark S&P/ASX200 index advanced 6.33 points, or 0.1%, to 6,661.20, while the broader All Ordinaries rose 4.35 points, or 0.06%, to 6,770. The benchmark finished the week up 0.3%.

The Sydney market commenced trading with firm footing, thanks to the European Central Bank cut interest rates and began a new stimulus programme and renewed optimism over a potential breakthrough in the US-China trade war.

China and the United States both announced concessions this week ahead of upcoming trade talks in early October. U.S. President Donald Trump later told reporters he may consider an interim trade deal with Beijing.

Meanwhile, the ECB on Thursday cut its Europe's benchmark interest rate further into negative territory by 10 basis points and launched a new bond buying program. The central bank also said it will buy approx. $22 billion worth of assets for as long as needed in a bid to revive flagging eurozone growth.

Shares of the banking sector gained, with Commonwealth Bank of Australia was the best performer among the "Big Four" lenders, climbing about 1%.

Energy stocks fell, bruised by a decline in oil prices. Oil and gas major Woodside Petroleum fell 0.4% and Oil Search closed nearly 1% lower.

The mining sector slipped, dented by Syrah Resources' more than 8% fall, after the graphite miner said it would reduce production in the third quarter and posted a huge rise in half-yearly losses.

Paladin Energy (PDN) slumped by 13% after successfully raising $30.2m from investors over the past two days at a near 15% discount to its closing price on Tuesday. The money raised will be partly used to cover its working capital requirements and maintenance costs.

CURRENCY NEWS: The Australian dollar rose against greenback on Friday. The Australian dollar, sensitive to shifts in broader risk appetite, changed hands at $0.6873 after touching highs above $0.687 yesterday.

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