Australian stocks rise as investors await central bank
HONG KONG (AP) — Australian stocks rose Tuesday as investors anticipated an interest rate cut by the country’s central bank while trading elsewhere in the region was mixed as two major markets were closed.
KEEPING SCORE: Australia’s S&P/ASX 200 rose 0.2 percent to 5,840.70 ahead of the conclusion of a central bank meeting. Hong Kong’s Hang Seng edged up 0.2 percent to 28,176.31 while the Shanghai Composite Index in mainland China lost 0.7 percent to 4,448.42. Benchmarks in Taiwan and Singapore fell while New Zealand’s rose. Markets in Japan and South Korea were shut for holidays.
DECISION DOWN UNDER: Most economists expect the Reserve Bank of Australia to cut interest rates by a quarter percentage point at its board meeting this afternoon. That would bring the central bank’s policy interest rate to an all-time low of 2 percent, providing additional monetary support for stocks and other financial assets. Australia’s economy is struggling as growth slows in China, its major market for iron ore and other commodity exports.
THE QUOTE: “It is a close call. We think that a 25 basis point rate cut is in the pipeline by June given that labor market conditions remain subdued and that household spending remains uncertain,” Mizhuho Bank strategists wrote in a market commentary. “If there is no rate cut at this meeting, we believe that RBA will keep a dovish rhetoric and will leave the door open for future policy easing.”
WALL STREET: U.S. stock benchmarks closed just short of a record, assisted by some positive earnings reports. The Dow Jones industrial average climbed 0.3 percent to 18,070.40 and the Standard & Poor’s 500 rose 0.3 percent to 2,114.49, within three points of its all-time high reached on April 24. The Nasdaq composite gained 0.2 percent to 5,016.93.
ENERGY: Benchmark U.S. crude fell 7 cents to $58.86 in electronic trading on the New York Mercantile Exchange. The contract fell 22 cents to close at $58.93 a barrel on Monday. Brent crude fell 7 cents to $66.38 a barrel in London.
CURRENCIES: The dollar strengthened to 120.15 yen from 120.11 yen in the previous trading session. The euro slipped to $1.1143 from $1.1147.