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Australia Market climbs on bargain buying, financials lead

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Headline indices of the Australian equity market closed higher for the first time in three days in row on Wednesday, 10 July 2019, as investors chased for bottom fishing, with banks and financials being notable gainers after S&P upgraded its outlook for the "Big Four" banks, following by energy stocks thanks to buoyant oil prices. Market gains were, however, capped on caution ahead of the Federal Reserve Chairman Jerome Powell's testimony for clues to near term U. S. monetary policy. At closing bell, the benchmark S&P/ASX200 index added 22.51 points, or 0.34%, at 6,688.20 points, while the broader All Ordinaries shed 25.98 points, or 0.38%, at 6,776.10.

Market focus will be on Federal Reserve Chairman Jerome Powell's testimony before the U. S. Congress on Wednesday and Thursday as investors look for clues to near term U. S. monetary policy. This comes just after a stronger-than-expected jobs report raised questions about the central bank's next move on interest rates.

The market has priced in a 25 basis rate cut. Investors are nervous as they wait to find out from Powell's comments on whether the Fed will continue cutting rates or not.

On the U. S.-China trade front, high level trade negotiations occurred between Beijing and Washington earlier this week, according to a U. S. official, who said both sides will continue these talks as appropriate.

Shares of banks & financials inclined, after S&P Global Rating upgraded its outlook for the Big Four to stable from negative after the financial regulator slapped less than expected capital buffer requirement on them. The big four banks - ANZ Banking, National Australia Bank, Westpac and Commonwealth Bank - were up in a range of 0.8% to 0.9%.

Energy stocks also advanced, boosted by a more than 1% jump in oil prices. The country's largest independent gas and oil producer Woodside Petroleum Ltd jumped 0.9% to a one-week high, while Oil Search Ltd rose 1.1%.

CURRENCY NEWS: The Australian dollar softened against the U. S. dollar on Wednesday. The Australian dollar changed hands at $0.6919 after slipping from levels above $0.695 yesterday.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, July 10 2019. 11:56 IST