The Australian sharemarket advanced for a second session on Wednesday, closing at a fresh three-month high as investor sentiment was buoyed by the Reserve Bank of Australia’s rate cut and the growing prospect of further monetary easing.
The S&P/ASX 200 index rose 43.5 points, or 0.5%, to finish at 8,386.80 - placing the benchmark 2% below its all-time high reached in February.
Gains were broad-based, with nine of the 11 sectors closing in positive territory. Energy and Utilities led gains.
Key utility players including Origin Energy, Genesis Energy, and AGL Energy gained 1%, 1.9%, and 0.2%, respectively.
Meanwhile, Santos added 1.3%, Woodside Energy gained 1.2%, Beach Energy added 0.8%, and Viva Energy also rallied 1.9% on the back of a rise in crude oil prices.
Investor appetite for equities was supported by falling bond yields after the RBA lowered the cash rate to 3.85% on Tuesday.
RBA Governor Michele Bullock revealed that the board had even considered a more aggressive 50 basis point cut, citing weakening global growth and easing inflationary pressures.
Financial stocks also contributed to the market’s strength, with Commonwealth Bank up 1.5% to fresh record highs, National Australia Bank climbing 1.2%, while Westpac ticked 0.2% higher following reports it plans to lay off more than 1,500 employees.
In the healthcare sector, Resmed surged 4%, CSL added 0.5%, and Fisher & Paykel Healthcare added 3.1%.
Gold miners surged as spot prices ticked higher, with Evolution Mining up 6.9%, Northern Star Resources lifting 3.2%, and Bellevue Gold adding 4.1%.
Wall Street provided a more subdued backdrop, with the S&P 500 falling 0.4% overnight after a recent rally that pushed the index into bull market territory.
Among individual companies, James Hardie Industries slumped 6.2% after adjusted net income fell 10%, with the firm warning of a “challenging market environment”.
Nufarm plunged 30.1% after the agricultural chemical producer downgraded its earnings outlook. The company reported a decline in first-half profit, citing weaker fish oil prices and higher operational costs.
On the bond market, yields moved higher, with the 10-year and 2-year government bond yields rising to 4.448% and 3.436%, respectively - up 1.2% and 1.4% on the day.
