Asian shares advance, Australian shares slip as RBA holds rates

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Asian shares advanced on Tuesday while Australian equities remained in negative territory after the Reserve Bank of Australia left rates unchanged as expected.

European markets are also poised for a positive start after the STOXX 600 index briefly touched an eight-month high on Monday. Financial spread better IG expects Britain’s FTSE 100 and Germany’s DAX to open 0.1 percent higher, and France’s CAC 40 to begin the day up 0.2 percent. U.S. markets were closed on Monday for Labor Day.

MSCI’s broadest index of Asia-Pacific shares outside Japan extended gains to 0.6 percent. Australian shares slipped 0.4 percent after the RBA’s decision to hold interest rates steady at 1.5 percent, as predicted by all 33 economists polled by Reuters, after cutting them to a record low in August. The Australian dollar rose 0.6 percent to $0.7626.

The decision came a day before government data is expected to show Australia notched up 25 years of economic expansion as of the June quarter.

Chief economist at Commonwealth Bank Craig James said Australia is zeroing in on the Netherlands’ gold medal for the longest economic expansion in the modern era.

Forecasts are now clustered around 0.5 percent to 0.6 percent for gross domestic product growth in the second quarter, with annual expansion seen accelerating to around 3.5 percent, the fastest pace in four years and well ahead of most of Australia’s peers in the rich world.

Japan’s Nikkei stock index closed up 0.3, with the dollar rising 0.2 percent on the day to 103.58 yen after retreating 0.6 percent on Monday.

While Bank of Japan Governor Haruhiko Kuroda conveyed readiness to ease monetary policy further in a speech on Monday, he acknowledged that the central bank’s negative rates may hurt confidence in Japan’s banking system, a sign that it is becoming more mindful of the rising cost of its stimulus.

 

The dollar index, which tracks the greenback against a basket of six major peers, was little changed at 95.781.

The euro was steady at $1.11475 even though German industrial orders missed expectations of 0.5 percent growth in July, rising only 0.2 percent from the previous month. Crude oil futures rose after top producers Russia and Saudi Arabia confirmed they had agreed on Monday to cooperate on stabilizing the oil market.

U.S. crude CLc1 jumped almost 2 percent to $45.31, while Brent crude LCOc1 was up 0.3 percent at $47.76 a barrel.

Source : Reuters

 

 

 

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