Australia Stocks extend gains | Business Standard News



Headline indices of the Australian financial market advanced on Wednesday, 16 January 2019, as investors continued hunting for risk assets after China’s government moved to inject more life into its economy by cutting taxes and increasing spending. Market gains were, however, capped in the wake of news of a crushing Brexit defeat in parliament for UK prime minister Theresa May. Among ASX sectors, shares of information technology sector led rally, followed by telcos and consumer staples, while the material issue weighed on the market. At closing bell, the benchmark S&P/ASX200 index added 20.60 points, or 0.35%, to 5,835.16 points, while the broader All Ordinaries index rose 21.95 points, or 0.37%, to 5,893.71 points.

Risk appetite buying continued in the Sydney market today as investors were encouraged to see China makes moves to stimulate growth. China’s leaders plan to reduce taxes, increase government spending, and provide financing to private and small enterprises in a bid to strengthen the world’s second-largest economy. China is enduring its worst slowdown since the global financial crisis, partly because of a punishing tariff dispute with the U. S.

The Chinese government will implement larger tax and fee cuts, especially for small businesses and the manufacturing sector, according to a press conference on Tuesday, 15 January 2019. The press conference was held in Beijing with Zhu Hexin, deputy governor of the People’s Bank of China, Xu Hongcai, assistant minister at the Ministry of Finance, and Lian Weiliang, vice chairman of the National Development and Reform Commission (NDRC). The officials were outlining plans for 2019 that were set at an annual policy meeting in December. China will avoid a flood of liquidity, and will maintain a stable macro-leverage ratio, the central bank’s Zhu said.


The central bank will also work more to improve policy transmission and guide funding costs lower, he said. Being prudent doesn’t mean the central bank can’t tweak monetary policies, Zhu said, adding that China’s policy will offer enough support to the economy.

Zhu also said the People’s Bank of China was confident it can keep the value of the yuan steady. China’s new yuan loans in 2018 was increased 2.64 trillion yuan (US$382 billion) from the previous year to 16.17 trillion yuan, according to a statement by the central bank before the press conference, signaling that December lending exceeded most economist estimates. China’s loans to small and medium-sized enterprises rose 17.1% in the January-November period over a year ago, according to the central bank statement.

Shares of tech companies advanced on tracking rally in the US peers. Language tech company Appen Limited jumped 4.4% to A$14.88, with Wisetech Global climbing by 3.5% to A$19.74 to continue the tech sector’s strong start to 2019. Afterpay Touch rose 2.6% to A$13.92, while Altium was up 1.1% to A$23.66.

Shares of banks and financials were also higher. Insurer QBE rose 1.8% to A$10.84, IAG was up 1% to A$7.18, Medibank Private gained 2.3% to $2.65, and Suncorp added 2.2% to A$12.55. Macquarie Group was up 0.9% to A$116.00, outpacing NAB, Westpac, ANZ and Commonwealth Bank.

Shares of materials and resources closed down. BHP shares were down 0.4% to A$32.93, and Rio Tinto dropped 0.5% to A$79.64. South32 was 2.1% lower at A$3.33, Fortescue Metals slipped 1.8% to A$4.47 and Bluescope Steel was 0.8% lower at A$11.88.

CURRENCY: Australian Dollar was down against greenback and against a basket of other peers on Wednesday. The Australian dollar was quoted at 71.98 US cents, from 72.14 on Tuesday; 78.09 Japanese yen, from 78.42; 63.09 euro cents, from 62.85; 55.98 British pence, from 55.90; and 105.59 NZ cents, from 105.47.

OFFSHORE MARKET NEWS: U. S. stocks rose on Tuesday as technology and internet stocks gained on Netflix Inc’s plans to raise fees for U. S. subscribers and hopes of more stimulus for China’s slowing economy after Chinese authorities indicated they will launch an economic stimulus package to help it through its current rough patch, but those gains were handed back after British MPs rejected Theresa May’s Brexit deal by 432 votes to 202, adding more uncertainty about the UK’s exit from the European Union. The Dow Jones Industrial Average rose 132.01 points, or 0.55%, to 24,041.85, the S&P 500 gained 24.87 points, or 0.96%, to 2,607.48 and the Nasdaq Composite added 107.07 points, or 1.55%, to 7,012.99.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)



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