Australian Market Rises after Federal Reserve’s Dovish Testimony

The Australian share market witnessed an upwards trend, as risk sentiments in the market emphasized on tracking of rallies overnight on Wall Street, following a dovish testimony by Jerome Powell the Chair at the Federal Reserve, which offered an increased prospect of a looser monetary policy. A large percentage of the businesses in the ASX sector were bolstered, with resource stocks being the largest earners.

The benchmark S&P/ASX200 index went up 0.5 per cent or 33.61 points, to reach a value of 6723.40 points, while All Ordinaries saw a rise of 0.52 per cent or 35.12 points to reach a value of 6812.80 points. Stocks in the market of the United States also ended up higher and crossed the 3000 point mark for a short while, after Powell’s testimony. The Dow Jones Industrial Average moved up by 76.71 points, while the NASDAQ Composite closed at a record high of 8202.53.

Powell: Central Bank to Support Record US Growth

Federal Chair Jerome Powell, in testimony to the House Financial Services Committee stated that business investments across the United States had witnessed a substantial slowdown recently, owing to uncertainties in the economic scenario.

He further stated that, numerous participants in the FOMC think that the scenario is more favorable towards a monetary policy that is more accommodative, and that the Central Bank of Australia would be standing ready to act as appropriate to support a record high in US growth. These statements confirmed market expectations for a rate cut.

Shares for the IT sector in the Australian market performed the best, and mirrored the overnight rise of counterparts in the United States. In addition the shares in the Australian energy sector also witnessed substantial growth owing to the increase in the prices of oil.

On the other hand, the Australian dollar saw little change against its United States counterpart. The rate exchange rates for the currency remained at a steady level of $0.6961 after an overnight rise of 0.5% against the widely weaker dollar. This rise aided the Australian dollar to move out of a slump of $0.6910 which lasted for a 2 ½ weeks.