Sharemarket rises as RBA cuts rates: Afternoon market insights

The sharemarket has risen today, after the Dow Jones closed flat on Monday and the RBA cut rates by 25 basis points.

At 3.30pm, the ASX200 gained 1.17% to 4031.7, rising back above the 4000 mark. The All Ordinaries index also gained 1.17% to 4080.5.

CMC Markets sales trader Ben Taylor said the 25 basis point RBA cut was consistent with the market’s expectations. “The RBA holding off on a 50bp cut shows conservatism and leaves the bank with further ammunition if the domestic or international environment were to worsen further,” he said.

“The fact that G7 central bank governors will be holding a conference call is signalling that collective stimulus is not far around the corner. Buyers are anticipating support on the expectations of collective central bank initiatives.”

The Australian dollar was trading higher after the announcement, gaining a third of a US cent before levelling back down to 97.5 US cents.

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