SYDNEY: The Australian stocks closed flat, reversing solid earlier gains following news that a Reserve Bank rate cut had not improved business confidence.
At the 4.15pm (AEDT) official market close, the benchmark S & P/ASX200 index had added 2.9 points, or 0.05 per cent, to 5,824.2, while the broader All Ordinaries index gained 1.3 points, or 0.02 per cent, to 5,794.3.
The benchmark index fell back from substantial intraday gains, at one point hitting as high at 5856.7 points, an increase of 0.61 per cent.
The reversal followed the release of National Australia Bank’s monthly business survey for February, which put business confidence at its lowest point since the 2013 federal election, as last month’s RBA rate cut failed to rally business sentiment.
Macquarie Private Wealth investment adviser John Milroy said the market gave up earlier ground after the survey suggested lower interest rates wouldn’t help struggling business confidence.
“People thought there would be another rate cut. But the implication was business conditions were so poor following the rate cut, the economy would continue to bubble at sub-trend levels — even if the RBA does cut rates again,” Mr Milroy said.
Meanwhile, the ANZ-Roy Morgan weekly consumer confidence survey showed that sentiment was at a three-month low.
Financial shares were stronger, despite Goldman Sachs’ downgrading of Australian bank stocks yesterday.
