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ASX ends up 1.93pc, best day since Oct 5

Steven Deare
·4-min read

Investors in Australia's share market have enjoyed the best session since October 5, but face great uncertainty with US election results due Wednesday.

The S&P/ASX200 benchmark index closed better by 115.1 points, or 1.93 per cent, to 6066.4 on Tuesday, after US markets closed higher.

The index rose to a session high of 6090.8 at 1508 AEDT in the wake of the Reserve Bank's decision to cut the cash rate to a record low 0.1 per cent, and buy more bonds.

The All Ordinaries closed higher by 115.4 points, or 1.88 per cent, to 6262.8.

All sectors rose. The standout was energy, which improved by 5.32 per cent following a rebound in oil prices.

Industrials gained 2.72 per cent, while property, consumer discretionaries and materials all had gains of more than two per cent.

The Reserve Bank's rate cut, which included a $100 billion bond buying program for five to 10 year maturities, was a big talking point.

Burman Invest chief investment officer Julia Lee said the bank extending its bond buying meant longer term interest rates would come down as well as short ones.

"Some people can't rely on term deposits for income, and that's why we see an uplift in the market today," she said.

Lower borrowing costs should benefit property investors, and those with shares in property trusts, Ms Lee said.

The rate cut was not good news for those with interests in banks.

"When interest rates are falling, home owners tend to pay off their mortgage faster," she said.

Meanwhile, Chinese trade strikes on Australian exports spread to timber and barley.

Agriculture Minister David Littleproud confirmed China has suspended exports of Australian logs from Queensland, and barley from another grain producer.

The suspensions follow customs clearance delays for $2 million worth of live Australian rock lobsters stuck on a Chinese airport tarmac.

On the ASX, Beach Energy will buy oil and gas assets in South Australia's Cooper Basin from Senex Energy in a $87.5 million deal.

Beach and Senex have been joint-venture partners in an oil-producing region of the basin called the western flank, but Senex wants to focus on its gas assets on the east coast.

Beach shares closed higher by 6.96 per cent to $1.23, while Senex shares gained 7.02 per cent to 30 cents.

Shares in freight provider Brambles increased 5.65 per cent to $10.10 after the company raised its earnings guidance.

Brambles said underlying profit growth would be between three and five per cent for the financial year.

Among the miners, BHP rose 2.63 per cent to $34.70, Rio Tinto gained 2.48 per cent to $94.79 and Fortescue was better by 0.46 per cent to $17.29.

In banking, ANZ rose 1.09 per cent to $19.47, the Commonwealth gained 1.38 per cent to $69.82, NAB crept up 0.43 per cent to $18.90 and Westpac lost 0.56 per cent to $17.70.

Earlier, US markets closed higher after more companies reported stronger profits than Wall Street forecast, and as reports on manufacturing came in better than expected.

On Wednesday, US election results are due, and investors are tipped to react quickly.

However, counting could take days to determine a result.

Ms Lee said a quick outcome for either candidate would be best for investors.

Building products supplier CSR will give its half-year earnings, while Woolworths will give its first quarter sales results.

The Aussie dollar was buying 70.40 US cents at 1719 AEDT, higher from 70.06 US cents at the close of trade on Monday.

ON THE ASX

* The S&P/ASX200 benchmark index closed up 115.1 points, or 1.93 per cent, to 6066.4 on Tuesday.

* The All Ordinaries closed higher by 115.4 points, or 1.88 per cent, to 6262.8.

* At 1719 AEDT, the SPI200 futures index was lower by two points, or 0.03 per cent, to 6050.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 70.40 US cents, from 70.06 US cents on Monday

* 73.73 Japanese yen, from 73.39 yen

* 60.42 Euro cents, from 60.21 cents

* 54.47 British pence, from 54.32 pence

* 106.21 NZ cents, from 106.14 cents.