While it is not necessarily material in the short-term, the biggest impact of yesterday’s political drama on Australia’s stock market will be the date of the election, experts have said.
The ASX200 was up 1.75% to 4,814.5 at 12:45PM, and closed up 1.68% at 4,811.3.
The Australian dollar was also stronger against the USD, trading up 0.6% to just over US93c.
Former Prime Minister Julia Gillard, from an investments perspective, didn’t do anyone any favours when she announced a September 14 election, months out from the actual date.
That hurt business confidence, and now some good might come from the likelihood of the election date being brought way forward now that Kevin Rudd’s taken over.
ANZ economist Ivan Colhoun said today in a report that this could be the case.
“The main issue for markets is what the events of today mean for the timing of the election. An earlier election may lift business and consumer confidence, which appears to have been weighed down by political uncertainty,” he wrote.
This was echoed by HSBC economist Paul Bloxham.
“Economic implications are on the margin but the leadership change may lift business confidence and could have implications for the timing of any further near-term RBA move, given their desire to stay out of the political spotlight,” he wrote in his report, out this morning.
Business is also happy the election could be brought forward.
“We’d call for an election as soon as possible because business confidence is low and to fix that we need to get this election done,” Business Council of Australia President Tony Shepherd told Bloomberg News.
Read more here.
Now read: REPORT: Kevin Rudd Has Been Planning Tax Cuts For Small Business And A Floating Carbon Price
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