Shares close at fresh six-year high
Despite pulling back a touch from the highs reached at midday, the Australian market still managed to close at a fresh six-year high. The All Ordinaries Index (XAO) rose by 0.6 per cent and improved for the 12th time in 16 trading sessions. With only one day remaining this month, local shares have surged by 4.3 per cent in July; making it the best month in a year for the Australian market.
All sectors ended higher, with improvements of at least 0.3 per cent for each industry. Despite a sluggish start, the major banks all strengthened, while Commonwealth (CBA) hit an intra-day all-time high of $83.29.
The retailers ended mixed with JB Hi-Fi (JBH) a standout, rising by 1.1 per cent while Myer (MYR) and Harvey Norman (HVN) both lost ground. Fashion retailer Noni-B (NBL) warned of an approximate full year loss of $2.2 million and shareholders pushed the stock 8.5 per cent lower in protest.
Australia's biggest supermarket chain Woolworths (WOW) rose by 1.57 per cent; however failed to release its quarterly sales numbers which were scheduled for release today. Insurance company QBE Insurance (QBE) improved for most of the afternoon to finish 4.4 per cent firmer by the close. On Tuesday, the $14 billion business warned of a likely miss in its half-year earnings to be issued next month.
By the close 1.98 billion shares were traded worth $4.77 billion. 576 stocks finished firmer, 393 stocks lost some ground and 380 were unchanged. The Australian dollar buys US93.7c and fell in the final hour of trade.
Looking ahead, despite some data scheduled for release in Europe tonight most of the focus will be on the US.
An estimate of US economic growth will be out at 10.30pm (AEST) and is likely to highlight a recovery in growth following an economic contraction over the March quarter.
Harsh winter weather caused the US economy to shrink by 2.9 per cent between January-March. The Federal Reserve (the US central bank) will be releasing its monthly statement on monetary policy at 4am (AEST) tomorrow morning. The tone of this statement is always important to get a sense of any changes in strategy and its outlook on the economy. The Fed is expected to reduce its stimulus program by US$10 billion per month to US$25 billion. A report on private sector jobs will also be in focus.
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