RTTNews - The Australian market ended in positive territory on Tuesday, led by banks and mining stocks, following positive economic data on the manufacturing activity that rose for the first time in 14 months during August raising hopes that the economy will rebound at a faster pace than initially anticipated. The decision of the Reserve Bank of Australia to leave interest rates unchanged also lifted market sentiment.
The benchmark S&P/ASX200 Index gained 0.70% or 35.50 points to close at 4,515, while the All-Ordinaries Index ended at 4,511, representing a gain of 27.20 points, or 0.61%.
On the economic front, the Reserve Bank of Australia decided to keep the interest rates unchanged at 3% in an effort to spur the economy and gauge the pace of recovery in the economy. Analysts are of the view that the central bank might wait and watch the response from the economy before deciding to hike interest rates before Christmas.
A report released by the Australian Industry Group and PriceWaterhouse Coopers revealed that manufacturing activity in the country expanded for the first time in 15 months in August, reflecting sharp increases in production, new orders and deliveries. According to the report, the seasonally adjusted Performance of Manufacturing Index climbed 7.2 points to 51.7 in August, rising above the 50 point level separating expansion from contraction.
In a separate report, the Australian Bureau of Statistics revealed that the country posted a seasonally adjusted current account deficit of A$13.34 billion in the second quarter compared to an upwardly revised deficit of A$6.35 billion in the first quarter.
The Statistics Bureau further stated that building approvals continued to fall, although at a slower pace in July. Residential building approvals were down 3.9% on a yearly basis in July, better than a 9.1% fall anticipated by economists and the 14.3% drop seen in June.
Light sweet crude oil price for October delivery ended at $70.38 a barrel in electronic trading, up $0.42 from its previous close $69.96 a barrel in New York on Monday.
Banks ended in positive territory on prospects of growth in the economy. ANZ Bank advanced 3.33%, Commonwealth Bank of Australia added 0.67%, National Australia Bank rose 2.49% and Westpac Banking gained 1.97%.
Metals and mining stocks also ended higher after UBS revised the forecast for the commodities sector. BHP Billiton gained 1.33%, Iluka Resources advanced 2.53%, Oz Minerals added 0.47% and Rio Tinto rose 2.33%.
Mixed trading was witnessed among the oil stocks following a sharp drop in crude oil prices in the international market on Monday. While Woodside Petroleum slipped 0.92% and Santos edged down 0.13%, Oil Search advanced 0.96% and Origin Energy gained 1.18%.
Qantas, the largest airline in the country, reported a rise in passenger traffic for the month of July compared to the same period last year, helped by huge discounts. The stock declined 1.19%.
Gold stocks ended in negative territory. Lihir Gold edged down 0.37%, Newcrest mining lost 0.87% and Sino Gold Mining slumped 4.87%.
In the U.S., stocks ended in the negative territory on Monday as traders preferred to lock-in gains from the recent rally and move to the sidelines amid sell-off in Chinese market. Traders shrugged off the results of the Institute for Supply Management - Chicago's survey of regional manufacturing activity, which showed that activity unexpectedly reached neutral territory in August following ten consecutive months of contraction.
The Dow closed down by 47.92 points or 0.5% at 9,496, the Nasdaq fell by 19.71 points or 1% to 2,009 and the S&P 500 slipped by 8.31 points or 0.8% to close at 1,021.
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