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ASX finishes higher following hopeful RBA comments

US President Donald Trump has threatened martial law. (Photo by Chip Somodevilla/Getty Images)

The benchmark S&P/ASX200 (^AXJO) has finished Tuesday up 0.27 per cent after a day of fluctuations.

It had gained 15.90 points to 5,835.10 points.

The broader All Ordinaries index (^AORD) also finished in the green, up 0.37 per cent.

Comments by the Reserve Bank of Australia Governor Philip Lowe buoyed the market in afternoon trade.

“Over the past month, infection rates have declined in many countries and there has been some easing of restrictions on activity. If this continues, a recovery in the global economy will get under way, supported by both the large fiscal packages and the significant easing in monetary policies,” Lowe said.

“Globally, conditions in financial markets have continued to improve, although conditions in some markets remain fragile. Volatility has declined and credit markets have progressively opened to more firms. Bond rates remain at historically low levels.”

Lowe also observed that the Australian economy is going through its biggest economic challenges since the 1930s.

“Notwithstanding these developments, it is possible that the depth of the downturn will be less than earlier expected. The rate of new infections has declined significantly and some restrictions have been eased earlier than was previously thought likely. And there are signs that hours worked stabilised in early May, after the earlier very sharp decline.”

What happened at midday?

The ASX200 continued wobbling in midday trade, down 0.18 per cent to 5,808.70 points.

The All Ordinaries also moved sideways today, edging 0.15 per cent lower to 5,929.60 points at 12:16pm AEST.

The uneventful morning session came ahead of the Reserve Bank of Australia’s monthly board meeting, where it decided to keep the official cash rate at the record low 0.25 per cent.

What happened this morning?

The ASX200 slid 0.25 per cent at the open on Monday to 5,804.60 points at 10:10am AEST as US-China tensions continued to grow. 

The All Ordinaries also rose before falling 0.091 per cent to 5,933.0 points.

US President Donald Trump has threatened to declare martial law as riots triggered by George Floyd’s death continue across the country. 

“In recent days, our nation has been gripped by professional anarchists, violent mobs, arsonists, looters, criminals, Antifa and others,” he said.

“As we speak, I am dispatching thousands and thousands of heavily armed soldiers, military personnel and law enforcement officers to stop the rioting, looting, vandalism assaults and the wanton destruction of property.”

What happened overnight?

Wall Street finished higher on Monday despite the violent social unrest in the USA. Stocks were buoyed on hopes of an economic recovery with Apple Inc, Facebook and leading the market higher. 

But US-China trade tensions continue to pose a worry for investors, after China ordered state-owned companies stop buying US soybeans and pork. The US angered China after Trump said he would stop special treatment for Hong Kong as China attempts to exert more control in the region. 

The Dow Jones Industrial Average rose 91.91 points, or 0.36 per cent, to 25,475.02, the S&P 500 gained 11.42 points, or 0.38 per cent, to 3,055.73 and the Nasdaq Composite added 62.18 points, or 0.66 per cent, to 9,552.05.

With AAP. 

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