The Australian share market surged to 11-years high on Friday, 17 May 2019, as investors risk sentiments underpinned by tracking positive lead from Wall Street overnight. Meanwhile, buying momentum aided by expectation that the Reserve Bank of Australia (RBA) will cut the cash rate in June after weaker than expected local jobs data. At closing bell, the benchmark S&P/ASX200 index rose 37.47 points, or 0.6%, at 6,365.30 points, while the broader All Ordinaries added 42.72 points, or 0.67%, at 6,460.21.
The local market extended gains for third day in row as investor sentiment was lifted by robust economic data released from the United States overnight and as concerns over the US-China trade war receded slightly.
Excessive worries over the US-China trade war that sent stocks sharply lower earlier this week are receding, with the assumption that any actual punitive measures would come in late June or later.
Meanwhile, risk sentiments bolstered after fresh data showed wage growth stagnating last quarter, fuelling market expectations that the Reserve Bank of Australia (RBA) would cut interest rates as soon as June. The RBA pinned its hopes on a robust labour market to lend support for a cooling economy. Markets took signs of labour market weakness as an argument for rate cuts. The April jobs report showed that unemployment rate crept to 5.2% from 5%.
Shares of materials and resources gained, led by major iron ore miners as the price of the bulk headed toward $100 a tonne, unphased by the ongoing trade war. BHP Group rose 4.5% to A$38.46, Rio Tinto advanced 6.4% to A$101.35 and Fortescue Metals Group climbed 18.7% to A$8.95.
CURRENCY NEWS: The Australian dollar declined against the U. S. dollar on Friday, after weak full-time employment data on Thursday cemented views the Reserve Bank of Australia would be forced to cut rates soon to stimulate the economy. The Aussie dollar slipped to 68.87 US cents on Friday, the lowest since early January when a currency flash crash briefly sent the Aussie to 67.43 US cents.
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