The Australian share market rallied on Tuesday with the Reserve Bank’s decision to keep interest rates on hold in August. Market analysts attributed the gains of 40.30 points or 0.54 per cent, which saw the ASX 200 end at 7,450.70, to two main catalysts.
Tony Sycamore, a market analyst, identified the first catalyst as the continuation of low interest rates and easy monetary policy. Rate stability has been a major factor in sustaining strong economic growth, and reducing the cost of borrowing to spur investment.
“The ASX200 experienced a 3.11 percent surge in July, and the upward trend continued into August as Wall Street and the Reserve Bank of Australia (RBA) caused a positive shift, with the RBA leaving the key cash rate at 4.10 percent,” Mr Sycamore said.
“The RBA observed the same factors that were considered last month when making the decision to keep rates steady – including the total 400 basis points of interest rate hikes and the apparent transition towards a balance between supply and demand. Prior to the announcement, the ASX200 was trading at 7438 +28 points, and after the on-hold decision was made, it rose to a peak of 7470, with an additional 42 points recorded.”
Mr Sycamore reported the IT sector was the star of Tuesday’s market, rising by 1.25 per cent. EML Payments led the way, increasing its value by 8.61 per cent to $0.82, while ZIP achieved a 6.74 per cent gain to $0.47. Additionally, the buy-now pay-later stocks Sezzle and Block rose by 5.19 per cent and 2.58 per cent respectively.