The Australian share market finished session slightly higher on Tuesday, 14 September 2021, as strength in energy stocks offset losses in industrials, tech and consumer staples stocks. At closing bell, the benchmark S&P/ASX200 advanced 12.09 points, or 0.16%, to 7,437.30. The broader All Ordinaries added 14.13 points, or 0.18%, to 7,740.26.
The top performing stocks in this index were BEACH ENERGY and CHALICE MINING, up 7.21% and 6.55% respectively, while the bottom performing stocks were BRAMBLES and UNITI GROUP, down 8.3% and 5% respectively.
Shares of energy companies advanced as rising oil prices and two large mergers in the sector. Woodside Petroleum rose 6.2%, Beach Energy added 7.2%, and the soon-to-be-merged Santos and Oil Search both added more than 5%.
Shares of miners were up despite a 4% drop in iron ore to $US124 per tonne. BHP and Rio Tinto finished 0.6% higher. Fortescue dropped 1.8%.
Brambles shares declined 8.3% on following an investor update. Brambles anticipates FY22 underlying profit growth of 1-2% with revenue growth of 5-6% with $US50 million of short-term transformation costs impacting its bottom line.
Shares in Uniti Group declined 5% after reports that executive director Vaughan Bowen had been charged with insider trading.
ECONOMIC NEWS: RBA Expects Australian Economy To Be Growing Again In December Quarter – The current Delta outbreak and lockdowns are a significant setback for Australia that would cause a sharp GDP contraction in Q3 of 2021, likely to be at least 2% and possibly significantly more, the Reserve Bank of Australia’s Governor Philip Lowe said in a speech.
The outbreak is a significant setback for the economy and it has introduced an additional element of uncertainty about the future. But there is a clear path out of the current difficulties and it is likely that we will return to a stronger economy next year. Prior to the Delta outbreak, the Australian economy had considerable positive momentum. Domestic final demand increased by 1.7% in the June quarter to be more than 3% above its pre-pandemic level. GDP was 0.7% higher in the June quarter and nearly 10% higher over the year.
However, the economy will start to recover quickly in Q4, amid a rapid pick up in vaccinations which should allow restrictions to be eased. While it is hard to be precise about the pace and timing of this bounce-back, in the RBA’s central scenario, economic activity is expected to be back on its pre-Delta track by the second half of next year, Lowe said. He reiterated that interest rates were not expected to rise from record lows until 2024 given the persistently sluggish growth of wages in the country. Lowe added that tightening would require wages growth above 3%, from the current 1.7% pace.
CURRENCY NEWS: The Australian dollar weakened to 73.36 US cents following a speech by RBA governor Phillip Lowe, where he re-iterated the RBA stance that interest rates would remain at historical lows of 0.1% until 2024.
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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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