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Market Update

Rates on Hold in Australia, Elevated Housing Market Worries RBA

Author: Marcus Jacob
Last Update: 10:36 AM ET July 07 2015

5:30 PM Sydney Reserve Bank of Australia left its reference rate unchanged and offered a slightly optimistic outlook for the economy but also highlighted elevated home prices especially in large cities.

Market indexes in Sydney jumped after the RBA left its key rate unchanged and offered a slightly positive outlook on the economy.

However, several policy committee members were concerned about the elevated home prices in large cities, especially in Sydney.

As widely expected, the Reserve Bank of Australia decided to leave cash rate unchanged at 2% for the second month in a row.

Australian dollar closed at 74.94 U.S. cents and in stock trading turnover gained to 751 million shares worth $5.2 billion.

At close, the ASX 200 Index jumped 106.40 or 1.9% to 5,581.40 and the broader All Ordinaries Index increased 100.70 to 5,564.

In commodities trading, gold added US$3 to US$1,169 an ounce and Brent crude rose 0.46 cents to close at US$57 a barrel.

Australian Stock Movers

AMP Limited jumped 3.5% to $6.28 after the investment company and the U.K.-based 3i Infrastructure Plc jointly agreed to acquire 50% stake in the Denmark-based shipping company Esvagt for about 4.1 billion Danish crowns or US$607 million from shipping and oil group A.P. Moller-Maersk.

Maersk group owns 75% stake in the Esvagt and the transaction is expected to close in September.

National Australia Bank Ltd increased 2.2% to $34.21 after the financial services provider plans to sell its U.K.-based sick unit Clydesdale Bank in this fiscal year.

Transfield Services Limited advanced 4.6% to $1.47 after the construction services provider was awarded a contract to work on the Toowoomba Second Range Crossing project for about $1.6 billion.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc