SYDNEY: Australian shares rose on Tuesday by their most in two weeks, as a tech-led overnight rally on Wall Street and upbeat US data helped investors look past dour domestic retail sales print and a central bank prediction the economic recovery would be bumpy. The S&P/ASX 200 index closed 1.88% higher at 6,037.6, with technology, energy and financials stocks leading the charge.
Meanwhile, the Reserve Bank of Australia left its cash rate at a record low of 0.25% and predicted a bumpy road to economic recovery, as the country's second-largest state Victoria remained in a virus-led lockdown. Data released earlier in the day showed domestic retail sales volumes suffered their biggest plunge in two decades in the second quarter.
The tech subindex rose more than 3%, with Afterpay surging over 6%. Energy stocks advanced 2.6%, led by a 4.7% rise in Santos Ltd, helped partly by overnight gains in oil prices. Financials stocks added 2%, with the 'big four' banks rising in a range of 1.7% to 2.3%.
New Zealand's benchmark S&P/NZX 50 index rose 0.9% to 11,771.7, helped by gains in financials and healthcare stocks. Overnight, the three major US indexes gained between 0.7% and 1.5% as signs of a rebound in multibillion-dollar deals bolstered risk sentiment.
Adding to investor confidence, an industry gauge indicated US manufacturing activity expanded in July at the fastest pace in more than a year. "The strong data from the US following positive Chinese data earlier on Monday reaffirmed that the global economic recovery was still in place," said Kyle Rodda, market analyst for IG Australia. A private business survey showed China's factory activity expand at the fastest pace in nearly a decade in July.
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