Investors were buoyed by the increased likelihood of a rate cut in September on the back of US data indicating a slowing of producer price inflation.
With Wall Street gaining overnight, the Australian Securities Exchange (ASX) followed suit. The S&P/ASX200 advanced 38.4 points, or 0.49%, to 7,865.20 points as of 10:34am AEST.
Nine of the 11 sectors are higher over the past week. Consumer Staples is today’s (14 August) best performing sector, up +1.03% for the past five days.
Reuters quoted Christopher Rupkey, chief economist at FWDBONDS, as saying producer price increases cooled this month, which is good news for the US Federal Reserve’s inflation fight.
“But there is no PPI deflation, so Fed officials do not have to rush to judgment and bring rate cuts forward because the economy is headed downhill,” he says.
The Australian Volatility Index was sharply lower, dropping 0.40 points, or 3%, to 13.01. The index has lost 11.59% for the last five days, but has gained 16.17% over the last year to date.
The S&P/ASX 200 VIX (A-VIX) is a real-time volatility index that provides investors, financial media, researchers and economists an insight into investor sentiment and expected levels of market volatility.
The index tracks S&P/ASX 200 index option prices as a means of monitoring anticipated levels of near-term volatility in the Australian equity market.
Australian gold producer Evolution Mining (ASX:EVN) and uranium explorer Deep Yellow (ASX:DYL) were among the top five early gainers, adding 6.7% and 4.1% to their respective share prices.
Meanwhile, Champion Iron (ASX:CIA) lost ground in early trade, edging back 1%. The ASX (ASX:ASX) was also in the bottom performers with a 2% decline.
Over the last five days, the index has gained 2.17% and is currently 3.46% off of its 52-week high.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: US Federal Reserve
