Australia Market extends gains on hopes of stimulus boost

Headline indices of the Australia share market were tad higher on Monday, 07 September 2019, as risk sentiment bolstered after China unveiled fresh stimulus measures and below-par US jobs data reinforced expectations the Federal Reserve will cut interest rates this month. Around late afternoon, the benchmark S&P/ASX200 index rose 3.57 points, or 0.05%, to 6650.90, while the broader All Ordinaries grew 8.47 points, or 0.1%, to 6761.20.

Investors returned to the market after with positive note on Monday, 09 September 2019, on expectations that the world's major economies would further loose monetary policies to support growth. The People's Bank of China on Friday said it would slash the amount of cash that banks must hold as reserves, releasing a total of 900 billion yuan ($126.35 billion) in liquidity to shore up an economy slowed by the Sino-US trade conflict.

Slower-than-expected U.S. payroll growth in August hinted at a slowing U.S. economy, helping cement expectations of an interest rate cut by the Federal Reserve later this month. Federal Reserve Board Chairman Jerome Powell said Friday that the central bank would continue to act "as appropriate" to sustain economic expansion in the world's biggest economy. There are also expectations that the European Central Bank would cut interest rates on Thursday.

Traders will turn their attention back to Westminster, where MPs are expected to pass a bill preventing Prime Minister Boris Johnson from taking Britain out of the European Union without a divorce agreement. Most economists have warned that a no-deal Brexit would hammer the economy.

Shares of banks and financials rallied on mortgage lending growth, with National Australia Bank having the biggest gains of the big four at 1.3%. Westpac shares were up 0.9%, while the Commonwealth and ANZ were higher by 0.5% and 0.4%, respectively.

Resources were the main drag, with gold miners in particular suffering heavy losses and among the worst performers on the ASX 200 index. Newcrest Mining (NCM) was down 3% while heavyweights BHP Group (BHP) and Rio Tinto (RIO) were both also weaker.

Suncorp Group (SUN) shares fell 0.3% as the financial services firm confirmed it had appointed interim CEO Steve Johnston as permanent CEO & Managing Director effective immediately.

ECONOMIC NEWS: Home loan values lifted 4.2% compared to expectations of a 1.5% improvement as both investment and owner-occupied lending growing above estimates.

CURRENCY NEWS: The Australian dollar rose against greenback on Monday, on expectation of stimulus measures from major economies to support ailing economic growth. The Australian dollar, sensitive to shifts in broader risk appetite, changed hands at $0.6843 following its rise from levels below $0.672 last week.

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