The Business Times

Australia: Shares at nine-month high as cenbank comments lift financials

Published Wed, Nov 18, 2020 · 01:58 AM
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[BENGALURU] Australian shares edged higher on Wednesday to hit their highest in nearly nine months after the central bank governor said the country was "on the road back", while gold stocks advanced as a resurgence in Covid-19 cases globally lifted bullion prices.

The S&P/ASX 200 index rose 0.5 per cent to 6,532 points by 2353 GMT, hitting its highest level since Feb 28.

Reserve Bank of Australia Governor Philip Lowe also said that rising home prices in Australia are not a cause for concern yet because demand is weaker due to slow population growth this year and next.

"Whenever the RBA governor says something positive, that will be taken onboard when it comes to investor decisions. That lifts the sentiment particularly in banks, that's why we're seeing a strong start from them today," James Tao, market analyst at CommSec said.

Still, concerns about a resurgence in coronavirus infections lingered as authorities conducted mass tests and about 4,000 people were confined to quarantine in an attempt to stifle a new cluster of cases.

Analysts were, however, positive on the overall situation in the country. Australia's three most populous states on Saturday had recorded at least a week with no local transmissions of the new coronavirus.


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"The Covid-19 situation is still much more promising here in Australia, despite the bit of cluster happening in Adelaide. The two largest states are performing quite well," said Tao.

Financials hit their highest since March 9, with the so-called "Big Four" banks trading in the black.

The gold sub-index, on the other hand, rose 1.1 per cent as bullion prices held in a narrow range on Tuesday.

United Malt Group was among the top percentage gainers on the benchmark, climbing as much as 8 per cent after the maltser posted its annual results.

Bourse operator ASX hit its lowest since Nov 4, after Morgan Stanley lowered price target and flagged rising costs following a software glitch that led to halt of trading on Monday.

New Zealand's benchmark S&P/NZX 50 index shed early gains to trade 0.5 per cent lower by 0056 GMT. The benchmark had posted gains for the past 11 sessions.


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