The ASX 200 had a strong day today rising more than 2% on a combination of remarkable bank strength, even after the ANZ’s disappointing results, and the RBA rate cut.
Here’s the scoreboard for today:
S&P ASX 200: 5,353.80 +111 +2.11%
All Ordinaries: 5,415 +103 +1.9%
AUD/USD: 0.7581 -0.0085 -1.11%
Banks shares did best on the with the ANZ up 5.56%, the NAB and CBA around 3.70% higher, while Westpac was up 2.34%. That’s a remarkable turnaround after yesterday’s weakness and the ANZ report which showed profit plunged 24% over the past half year.
Energy stocks were the biggest loser of the sectors of the ASX today dropping 1.36% after crude oil pulled back last night. Basic materials – the miners essentially – were also lower with Rio Tinto losing 1.24%, BHP down 0.91% and Fortescue losing 3.24%.
Here’s the chart
The top stories Tuesday:
1. The RBA cut the cash rate to a record low of 1.75% taking at least half the market by surprise and catching market punters who sold interest rate futures and bought the Australian dollar in the hours before the announcement.
2. That meant that the Australian dollar was destroyed in the aftermath of the RBA announcement. It’s held support at 0.7540 so far but it still dropped 15 cents this afternoon.
3. It’s amazing how the fear of a Royal Commission can change the reaction time of the big banks to the RBA’s decision to cut rates. So far the NAB is the only major to announce its decision but it’s following the RBA with full 25-point cut in its mortgage rate.
4. More rate cuts are coming says the economist who was the first to call this cut last year. Paul Dales from Capital Economics says rates will fall to 1.5% in August.
5. Scott Morrison seems to understand the harsh truth about Australia’s economy. But Paul Colgan says the release of the budget tonight will tell us if he can do anything about it.
6. Once the treasurer is done with selling the budget he might need to build a few bridges with our Chinese trading partners after the Chinese investor chasing S. Kidman has walked away.
7. First you can’t stay up late and drink, now you can’t eat rare hamburgers according to the NSW Food Authority, which is concerned that the likes of Neil Perry’s Burger Project is serving “pink” meat. Burger fans are cranky about the government authority’s intervention, which comes after Merivale boss Justin Hemmes told the inquiry into Sydney’s lockout laws that it was ruining the city’s economy and even more embarrassingly, meant he had to turn away the likes of Madonna, Prince and Ed Sheeran when they tried to come for a late night drink at a Merivale pub.