1 day Ago By Bray Boland
The ASX200 has hit another all-time high, receiving a boost from the US Federal Reserve's decision to slash interest rates for the first time since 2020 with its 50 basis point reduction. At noon AEST, the benchmark S&P/ASX200 had climbed to 8,152.5, up 10 points, or 0.
13 per cent, with the broader All Ordinaries also sitting steady, up 10 points, or 0.13 per cent at 8,374.5.
The ripple effect from the US rate cut gave the ASX200 a jolt upon opening, shooting it to an all-time high of 8,186 before levelling out again at midday. Financial market analyst Kyle Rodda from Capital.com said the 50 basis point reduction in US interest rates was a move normally reserved for financial turmoil or economic shock.
"Stocks pared gains, dollar bounced, and gold fell for the session," Mr Rodda said. "Despite ostensibly giving what the market wanted, price action shifted during the press conference." US Federal Reserve chair Jerome Powell spoke of "recalibration" at the press conference following the rate decision, but it's unclear whether the reduction will curb inflation as predictions signal another 50-point cut before the end of the year.
The decision by the US Federal Reserve came as a surprise to many economists who had predicted a 25 point cut. "The Fed lowering rates by 50 basis points was only priced in as a 60 per cent probability, so it remains a bit of a dovish surprise," Saxo strategist John J. Hardy said.
Locally, six of the 11 major sectors of the Australian market were in the red with industrials taking the biggest hit as 1.3 per cent was clipped from its previous number. Rio Tinto climbed one per cent and BHP rose 0.
3 per cent while Fortescue and Evolution Mining fell 0.5 per cent and 2.1 per cent respectively.
Utilities continued to make the biggest push forward for the second day in a row, increasing one per cent with Origin Energy jumping 2.1 per cent and AGL 1.1 per cent.
Financials climbed 0.3 per cent, with three of the big four banks in the green. Westpac and ANZ had increased around one per cent and CBA 0.
5 per cent, while NAB had a modest reduction of 0.1 per cent. Insurance company QBE took a 1.
3 per cent hit. Real estate lifted one per cent with Scentre Group and Stockland up 1.5 per cent and Goodman Group one per cent.
The Australian dollar climbed slightly, buying 67.72 US cents, from 67.66 at Wednesday's ASX close.
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