Market lifts following Reserve Bank’s decision to hold cash rate

The Australian share market has “kicked off August in style” after the Reserve Bank made a huge call on interest rates.

The Australian share market has celebrated after the Reserve Bank announced it will keep interest rates on hold again in August.

The ASX200 ended Tuesday on a high, gaining 40.30 points or 0.54 per cent to 7,450.70.

The market had two reasons to celebrate on Tuesday, according to market analyst Tony Sycamore.

“After locking in a 3.11 per cent gain in July, the ASX200 has kicked off August in style, boosted by gains on Wall Street and as the RBA kept its key cash rate on hold today at 4.10 per cent,” Mr Sycamore said.

The markets responded well to the RBA’s decision to hold interest rates, gaining 40.30 points. Picture: NCA Newswire / Gaye Gerard

“The RBA’s decision to keep rates on hold was based on similar reasons as last month – to assess the impact of a cumulative 400 basis points or rate hikes and evidence that a sustainable rebalancing between supply and demand is under way.”

“The ASX200 was trading at 7438 +28 points before the RBA announcement before surging another 42 points to a high of 7470 after the on-hold decision.”

The IT sector was Tuesday’s standout, according to Mr Sycamore, increasing its worth by 1.25 per cent.

EML Payments led the way by adding 8.61 per cent to $0.82 while ZIP gained 6.74 per cent to $0.47 and fellow buy-now pay-later stocks Sezzle and Block added 5.19 per cent and 2.58 per cent respectively.

It was far from the only sector seeing growth on Tuesday, with nine out of 11 in the green.

Materials was the second best performing, its growth of 0.92 per cent aided from Chinese authorities announcing measures on Monday to support consumption and the property market.

“The Chinese authorities are slowly but surely providing the policy support needed to backstop the economy and boost resource stocks,” Mr Sycamore said.

Fortescue gained 1.38 per cent to $21.98, BHP added 0.78 per cent to $46.37 and Mineral Resources gained 0.17 per cent to $71.55.

Meanwhile the energy providers are also up, with the price of crude oil closing higher at $81.86 (+1.59 per cent) to lock in a 15.77 per cent gain in July.

“The rally came on the back of tight supply and “Goldilocks” in the US – falling inflation, strong growth data and a dovish Fed.” Mr Sycamore said.

Beach Energy added 2.17 per cent to $1.65, Santos added 0.75 per cent to $8.02, and Woodside Energy added 0.50 per cent to $38.18.

A similar story for the big banks as Macquarie gained 1.42 per cent to $177.50, NAB added 0.56 per cent to $28.58, Westpac added 0.40 per cent to $22.43, ANZ gained 0.50 per cent to $25.88, and CBA added 0.13 per cent to $105.85.

Out of all of the gains on Tuesday, TPG came out on top, growing its price by 12.35 per cent to $5.64 at the end of the day followed by Gold Road which rose by 9.05 per cent to $1.72 and Sayona Mining which rose 5.17 per cent to $0.15.

On the bottom was Credit Corps falling by 12.71 per cent to $20.60 after announcing a five per cent drop in net profit this financial year.

That was followed by AUB which dropped 2.89 per cent and Nufarm which dropped 2.42 per cent.

Originally published as Market lifts following Reserve Bank’s decision to hold cash rate