The Australian equity market closed higher on Wednesday, 19 June 2019, as risk sentiments underpinned by hopes U. S. and Chinese leaders would revive stalled trade talks after U. S. President Donald Trump said in a tweet he had a very good telephone conversation with Chinese President Xi Jinping, with a meeting between the two set to happen next week. Meanwhile, buying sentiments were underpinned by the possibility that the European Central Bank could inject the eurozone with an economic stimulus, along with expectations for an eventual interest rate cut by the US Federal Reserve. At closing bell, the benchmark S&P/ASX200 index inclined 78.10 points, or 1.2%, at 6,648.10 points, while the broader All Ordinaries added 80.57 points, or 1.2%, at 6,728.50.
The US share market climbed on Tuesday after U. S. President Donald Trump said in a tweet he had a very good telephone conversation with Chinese President Xi Jinping, with a meeting between the two set to happen next week. The Dow Jones Industrial Average soared 353.01 points to 26,465.54 and the S&P 500 advanced 1% to 2,917.75. The Nasdaq Composite rose 1.4% to 7,953.88.
President Donald Trump tweeted that he had "very good" talks with China's President Xi Jinping and that the two leaders would have an "extended meeting" at the G20 summit in Japan later this month. The summit will start on June 28. A short time later, Xi echoed Trump's upbeat tone, saying that China and the United States should push for "positive outcomes" at the summit of world leaders, in order "to inject confidence and vitality into the global market."
Trade tensions between the two economic powerhouses had worsened in recent weeks with both raising tariffs on billions of dollars worth of their goods. Trump had also previously suggested that additional levies could be imposed on more Chinese imports.
Meanwhile, the U. S. Federal Reserve kicked off a two-day monetary policy meeting on Tuesday. The Fed is widely expected to leave interest rates unchanged at this meeting, though investors will be watching out for hints on rate cuts later in the year. Expectations for a rate cut have increased in recent weeks, amid data on slowing jobs growth and manufacturing activity, as well as concerns over the impact of Washington's protracted trade fight with Beijing on the global economy.
Furthermore, Mario Draghi, president of the European Central Bank, indicated there could be more stimulus measures in Europe.
At home, the Reserve Bank of Australia has decisively shifted to an easing stance, cutting rates earlier in June and saying further reduction would likely be needed.
Australia's mining sector, highly exposed to top trade partner China, was among the biggest gainers, with iron ore miner Fortescue Metals Group rising more than 5%. Global miners BHP Group and Rio Tinto also climbed as much as 2.6% and 3%, respectively.
Financial stocks rallied, with the country's Big Four banks gaining between 0.6% to 1.3%.
Afterpay Touch Group rose as much as 6.5%, as investors return to the 'buy now, pay later' company after the country's financial crime watchdog ordered an audit over money-laundering concerns.
CURRENCY NEWS: The Australian dollar fell against the U. S. dollar partly due to lower interest rates. The Australian dollar was at $0.6874 after rising from levels below $0.685 yesterday.
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