Expectations of more interest rate cuts in Australia look likely to overcome a negative tone set on Wall Street and push prices higher on the Australian Securities Exchange (ASX) on Wednesday.
Futures trading indicated an optimistic outlook for the day known colloquially as ‘hump day’, with the S&P/ASX 200 June share price index contract quoted 52 points (0.62%) above the previous settlement at 8,421 at 9:35 am AEST (11:35 pm GMT Tuesday).
The mood was set by the Reserve Bank of Australia on Tuesday not only cutting official interest rates by 25 basis points but also adopting a more dovish tone with its outlook comments, leaving economists forecasting at least two more cuts this year.
This appears to have overshadowed the impact of United States stocks falling on Tuesday (Wednesday AEST) under the weight of factors including rising U.S. Treasury yields and falling technology share prices.
The Dow Jones Industrial Average, S&P 500 and tech-heavy Nasdaq Composite fell by 0.3%, 0.4% and 0.4% respectively overnight.
By contrast technology shares were in favour in Australia on Tuesday in the wake of the rate cut, with the S&P/ASX 200 ending 0.6% higher at a three-month high of 8,343.3.
Stocks in focus today include James Hardie (ASX: JHX), Nufarm (ASX: NUF) and Webjet (ASX: WEB), which have announced their latest earnings results, and Dicker Data (ASX: DDR), which holds an annual general meeting.
On fixed interest markets, Australian government bond yields tracked their U.S. counterparts higher, with 10-year rates rising 0.43% to 4.414% and two-year rates adding 0.27% to 3.398%.
