5:30 PM Sydney, Australia – The Reserve Bank of Australia left the official cash rate unchanged at historic low 2% and held out for a possible rate cut in 2016. Building approvals increased 3.9% in October. ASX 200 index soared 1.9%.
Bargain hunting and positive economic news drove Australian markets higher on Tuesday after losses in BHP Billiton, Slate & Gordon, and Dick Smith in the previous session.
BHP Billiton jumped 3.7%, Slater and Gordon recouped 28%, and Dick Smith Holdings surged 25%.
The Reserve Bank of Australia kept interest rates on hold at a record low of 2%, as inflation still hovered below the central bank’s target range of 2% to 3%.
The central bank didn’t exclude the possibility for another rate cut in 2016 and cited weakening global scenario for commodities market.
Building approvals increased 3.9% in October to 19,652, following an increase of 2.2% in September, according to the Australian Bureau of Statistics. The data exceeded beats market and analyst projections.
Current account deficit in the third quarter narrowed down to $18.10 billion from $20.5 billion in the second-quarter.
The Australian dollar slid to 72.62 U.S. cents and stock trading turnover slid to 1.08 billion shares worth $6.2 billion.
At the close, the ASX 200 Index jumped 99.60, or 1.9%, to 5,266.10, while the broader All Ordinaries Index increased 94.40 to 5,312.60.
In commodities trading, gold soared US$14 to US$1,071 an ounce and Brent crude future for immediate month delivery added 16 cents to US$44.77 a barrel.
8IP Emerging Companies Limited
closed unchanged at $1 after the mortgage broker priced its initial public offering at $1 a share
Australian Stock Movers
Freedom Foods Group Ltd
gained 1.9% to $3.12 after the food producer completed the acquisition of rival cereal and snack producer Popina Foods.
Decmil Group Limited
slumped 3.7% to 91 cents after the mining, infrastructure, oil and gas services provider agreed to acquire telecommunication company SC Holdings Pty Ltd for about $14 million.
QMS Media Ltd
was halted at $1.19 after the media and advertising company announced plans to acquire New Zealand-based rival iSite for about $44.4 million.
The company plans to raise $50.3 million to fund the acquisition, a 1-for-5 accelerated non-renounceable pro rata entitlement offer for $41 million, and a retail entitlement offer for another $9.3 million.
iSite has 450 billboards, presence on more than 1,500 buses in New Zealand, and a growing digital billboard portfolio.