Australian stocks rise as major Asian markets remained closed for holidays

Published On: May 2, 2019Categories: Stocks & Shares2.2 min read

Stocks in Australia advanced as most major Asian markets stay shut for holidays

Stocks in Australia advanced on Wednesday as most major Asian markets remained closed for holidays.

The ASX 200 gained 0.8% to close at 6,375.90 as the heavily weighted financial subindex Down Under added more than 1.4%. Shares of Australia’s so-called Big Four banks rose; Australia and New Zealand Banking Group jumped 2.76%, Commonwealth Bank of Australia gained 1.32%, Westpac added 2.29% and National Australia Bank advanced 1.70%.

In overnight market action on Wall Street, the S&P 500 climbed to a new record, gaining about 0.1% to close at 2,945.83. The Dow Jones Industrial Average also added 38 points to finish its trading day at 26592.91.

The moves came amid the ongoing earnings season, with more than half of the S&P 500 companies having reported by the end of the trading day stateside on Tuesday.

Meanwhile, investors also continue to watch out for developments on the U.S.-China trade front. White House Chief of Staff Mick Mulvaney said Tuesday that the Trump administration’s trade talks with China will be resolved within the next two weeks.

Following Mulvaney’s comments, U.S. Treasury Secretary Steven Mnuchin said on Wednesday that he had a “nice” working dinner the prior night with Chinese Vice Premier Liu He in Beijing.

Mnuchin and U.S. Trade Representative Robert Lighthizer are currently in the Chinese capital as the two economic powerhouses aim to reach a deal to end their protracted trade conflict.

The U.S. Federal Reserve is also set to announce its monetary policy decision later on Wednesday stateside. Fed watchers will be closely monitoring if the central bank changes its dovish tone and how it plans to proceed with its balance sheet reduction program.

Ahead of that decision, U.S. President Donald Trump called for the Fed to slash interest rates by 1 percentage point and to implement more quantitative easing.

Joseph Capurso, senior currency strategist at Commonwealth Bank of Australia, wrote in a morning note that they expect the (Federal Open Market Committee) to leave the Funds rate steady and also expect the FOMC to make no more than minor changes to its post‑meeting statement. The first paragraph of the post‑meeting statement will acknowledge Friday’s better than expected GDP growth. They expect little reaction by the USD to the FOMC meeting.

There was, however, a “risk” the FOMC could lower the interest rate on excess reserves to bring down the effective Funds rate, he added.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.491 following an earlier high of 97.528.

The Japanese yen traded at 111.49 against the dollar after strengthening from levels above 111.6 in the previous trading session. The Australian dollar changed hands at $0.7049 after touching an earlier low of $0.7035.

Oil prices declined in the afternoon of Asian trading hours, with the international benchmark Brent crude futures contract slipping 0.67% to $71.58 per barrel. U.S. crude futures also fell 0.97% to $63.29 per barrel.

About the Author: Jonathan Adams

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