Headline indices of the Australian equity market closed higher on Wednesday, 03 July 2019, as most of ASX sectors inclined, with materials and resources stocks continued to benefit from stronger commodity prices, meanwhile RBA interest rate cut continued lent support to real estate stocks. On the other hand, decline in heavyweight banking shares on fears of stricter lending policies, trimmed market gains. At closing bell, the benchmark S&P/ASX200 index advanced 32.25 points, or 0.5%, at 6,685.46 points, while the broader All Ordinaries rose 29.02 points, or 0.43%, at 6,770.12.
Shares of materials and resources continued to benefit from strong iron ore prices. Chinese iron ore prices have doubled in value this year amid supply concerns over Brazil's Vale SA after outages at several of its projects. Miners BHP Group and Rio Tinto added about 0.6% and 1.2%, respectively. Fortescue Metals Group, the world's fourth-largest iron ore miner, added 1.6%.
Healthcare stocks were higher, with CSL, up 0.6%. As CSL conducts most of its business overseas, particularly in the United States, it too stands to benefit from a weaker local currency.
Financial stocks dropped, with major four banks extended losses in the range of 0.3% to 0.9% after the securities regulator outlined plans to make lenders carry out more thorough credit checks on potential borrowers.
The big four, barring Australia and New Zealand Banking Group, on Tuesday also resisted public pressure to pass on a central bank rate cut in full to customers, risking a rebuke from the government.
Supermarket operator Woolworths Group rose more than 3% after it outlined plans to spin-off and list its drinks and hospitality businesses. Woolworth's is looking to focus on its core supermarket business, which has come under pressure from weak retail spending and heavy price competition.
ECONOMIC NEWS: Australia AiG Service Sector Expands At Slower Pace In June -- Australia service sector continued to expand in June with a Performance of Service Index score of 52.2, the latest survey from the Australian Industry Group revealed on Wednesday. That's down from 52.5 in May, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Among the consumer-oriented services, hospitality, health and recreation all expanded, while retail trade strengthened but remained in contraction. In business-oriented services, property, wholesale trade and finance expanded, while transportation remained deep in contraction territory.
CURRENCY NEWS: The Australian dollar was little changed against the U. S. dollar on Wednesday. The Australian dollar changed hands at $0.6996 after rising from the $0.696 handle yesterday.
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