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Australia Market rises 0.44%

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The Australian share market modestly advanced on Thursday, 19 September 2019, after the U. S. Federal Reserve announced its widely expected decision to cut its interest rate for a second time this year, citing slowing global economic growth and uncertainty over U. S. trade conflicts. Total 10 of 12 sectors were higher, with gold companies and a sluggish energy sector the only underperformers. Around late afternoon, the benchmark S&P/ASX200 index added 29.61 points, or 0.44%, to 6,711.20, while the broader All Ordinaries rose 30.65 points, or 0.45%, to 6,821.90.

The US central bank's Federal Open Market Committee on Wednesday reduced its benchmark interest rate by 25 basis points to a range of 1.75% to 2%, the second cut this year, in a bid to stimulate the economy amid growing global headwinds. The central bank also widened the gap between the interest it pays banks on excess reserves and the top of its policy rate range, a step taken to smooth out problems in money markets that prompted a market intervention by the New York Fed this week.

Projections show Fed officials are divided on the path for rates but do not expect additional cuts this year or next, disappointing a market that had been looking for further easing.

The Bank of Japan left its base rate unchanged on Thursday just hours after the Federal Reserve cut the fed funds rate for the second time and weeks after the European Central Bank restarted it quantitative easing bond purchases.

Brazil's central bank also cut its benchmark rate, by 0.5%, and more decisions were expected later in the day from Indonesia, the Bank of England and the central banks in Sweden and Norway.

Construction materials firm Brickworks was the top performing on the S&P/ASX 200, up 6.1% following the release of full-year profits. Telecommunications firm Speedcast was also up 6%, after the company announced it had won a new contract to supply satellite communications to an Indian cruise line. New Hope was the worst performer on the index for the session, sliding 4.8% as Credit Suisse described the outlook for the company in the current fiscal year as challenging.

The big four banks were higher. ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac were up in a range of 1% to 2%.

The major miners were also higher. The world's largest miner BHP Group, Rio Tinto, and Fortescue Metals were up in a range of 0.2% to 1%.

ECONOMIC NEWS: The Australian Bureau of Statistics (ABS) on Thursday that nation's jobless rate climbed to 5.3% in August, its highest level in a year, after 15,500 full-time jobs disappeared across the country. The ABS said total employment lifted by 34,700 in August, however, it was due to a 50,200 surge in part-time employment. The total number of people out of work lifted by 4100 and now sits at 716,800 - its highest number since April last year.

CURRENCY NEWS: The Australian dollar declined against greenback on Thursday, amid n increased chance of a rate cut as soon as the Reserve Bank of Australia's (RBA) next policy meeting on Oct. 1 after Australian jobless rate worsened to a one-year high of 5.3%. The Australian dollar, sensitive to shifts in broader risk appetite, changed hands at $0.6829, compared to $0.6844 on Wednesday.

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

First Published: Thu, September 19 2019. 11:19 IST
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