Australia: Market rises on RBA minutes, lower virus cases

The Australian share market finished session higher on Tuesday, 18 August 2020, as investor sentiment boosted up on reports of further decline in COVID-19 cases in Victoria and NSW, encouraging signs for a coronavirus vaccine and the central bank's minutes showed some optimism around its economy.

At closing bell, the benchmark S&P/ASX200 index added 46.98 points, or 0.77%, to 6,123.36. The broader All Ordinaries was up 50.19 points, or 0.81%, to 6,268.73.

The RBA August meeting minutes revealed that board members believe the worst of the global contraction caused by the Covid-19 pandemic has passed, but considerable uncertainty remains. The Reserve Bank of Australia (RBA) does not see a need to further ease policy for now as its measures were working "broadly as expected" with a recovery underway in most of the country, its August policy meeting's minutes showed.

Aiding sentiment, lower Covid-19 cases were reported in Victoria and New South Wales and Australia is now set to mark its lowest one-day rise in infections in a month.

Materials and resources were up, with Rio Tinto gaining 1.1% and Fortescue Metals Group advancing 1.3% as iron ore futures extended gains on upbeat demand prospects in top steel producer China. BHP fell by 0.5% after handing down an underwhelming set of full year results. Net profit fell by 4% to US$7.95bn. The final dividend of US$0.55 was a 30% decline on last year.

Gold miners were up, with Regis Resources and Norther Star Resources up around 5% as the yellow metal touched its highest level in nearly a week. Evolution Mining gained 2% after announcing it has resumed operations at its Red Lake Gold Mine in Canada.

Banks and financial were lower. Westpac (WBC) lost 2.3% after deciding to scrap its interim dividend which it usually pays to investors in June or July. WBC deferred the decision a couple of months ago due to COVID-19 uncertainty. WBC handed down a $1.32bn cash profit between April and June, which was mostly driven by lower than expected bad and doubt debts in the quarter. The other three big banks also ended in the red.

Healthcare stocks climbed. CSL surged 4.4% after the biotech company said it is considering its capacity to produce multiple vaccines.

Treasury Wine Estates (TWE) finished 14.3% lower on media reports suggesting China has kicked off a probe into the alleged dumping of Australian wine into the Chinese market.

CURRENCY NEWS: The Australian dollar changed hands at $0.7236 after yesterday's rise from below $0.72.

Powered by Capital Market - Live News