SYDNEY: The Australian stocks closed substantially stronger, as the potential for a Reserve Bank of Australia rate cut next week rallied the market.
At the 4.15pm (AEDT) official close, the benchmark S & P/ASX200 index had risen 37.8 points, or 0.64 per cent, to 5,898.6, while the broader All Ordinaries index increased 36.8 points, or 0.63 per cent, to 5,869.7.
The RBA board meets next Tuesday to consider whether it will cut the official cash rate for a second time this year. The central bank lowered the rate to a new record low of 2.25 per cent in February but surprised the market by leaving it unchanged in March.
The banks led today’s market rally as investors returned to high-yielding stocks ahead of the RBA meeting.
Overnight, the global benchmark oil price
jumped after US weekly production declined for the first time in two months. Gold gained and base metals mostly rallied.
But Australia’s most important resource, iron ore, collapsed below the $US50 a tonne level in the last trading session, declining for a sixth day on the outlook for a supply flood as production rises — a far cry away from the $180 a tonne the material was fetching in 2011.
