Australian shares are expected to resume their ascent on Tuesday as investors await confirmation of widely-held expectations of an interest rate cut.
A stronger finish on Wall Street has positioned the market for a rise of 0.87% when the Australian Securities Exchange (ASX) opens but attention will turn to the Reserve Bank of Australia for its monetary policy announcement at 2:30pm AEST.
With markets pricing in a 25 basis point reduction, a greater focus will be the RBA’s comments about the outlook for rates on a day with little corporate news scheduled.
At 9:15 am AEST (11:15 pm GMT Monday) the S&P/ASX 200 June share price index contract was quoted 73 points above the previous settlement at 8,384, taking its cue from the United States.
U.S. stock indices finished in the black on Monday (Tuesday AEST) despite Moody’s downgrading the U.S. Government’s credit rating as market interest turned from trade topics to corporate news and debt.
The Dow Jones Industrial Average added 0.32%, the S&P 500 gained 0.09% and the Nasdaq Composite put on 0.02% as indices recovered losses suffered earlier in the session.
Moody's had slashed the U.S. sovereign credit rating to Aa1 from Aaa after markets closed on Friday due to the government's US$36 trillion debt and interest.
The Australian market had finished down on Monday for the first time in nine sessions with the S&P/ASX 200 losing 0.7% to 8,288.5 points as nine of the 11 sectors lost ground.
In corporate news, Technology One (ASX: TNE) shares would be expected to react to the release of its half year results.
On fixed interest markets, Australian Government bond yields dropped with 10-year rates slipping 0.07% to 4.473% and two-year rates easing 0.33% to 3.573%.
