The share market is more than one per cent higher as investors anticipate a rate cut by the Reserve Bank.
Financial markets are widely expecting the central bank to cut the cash rate to a new record low of two per cent at its April meeting on Tuesday.
Those expectations, and an easing of concerns over the timing of an interest rate hike in the US, are driving trade, CMC Markets chief market analyst Ric Spooner said.
Wall Street rose on Monday as investors considered whether a poor jobs report could convince the US Federal Reserve to postpone an interest rate rise that had been expected as early as June.
“The other thing that is playing into our market today is an expectation that we’re going to see a rate cut from the Reserve Bank this afternoon,” Mr Spooner said.
Stocks that benefit from an interest rate cut include those offering a high dividend in relation to their price.
It would also boost stocks exposed to consumer spending, and those with a high level of overseas earnings, as a rate cut is likely to weigh on the Australian dollar.
Among the major banks, who pay attractive dividends, Commonwealth Bank was up 96 cents at $95.36, National Australia Bank had lifted 70 cents to $39.39, ANZ had gained 38 cents to $37.05 and Westpac was 46 cents higher at $39.91.
In retail, Myer was up 1.25 cents at $1.3125 and Harvey Norman was two cents firmer at $4.40, as new figures showed the strongest pace of retail spending growth in five months in February.
The miners were higher despite further weakness in iron ore prices, with BHP Billiton up 47 cents at $30.69, Rio Tinto up 86 cents at $56.64 and Fortescue Metals was 2.5 cents stronger at $1.845.
Atlas Iron’s shares have been suspended from trade as it launches an extensive review of its operations, finances, and possible asset sale opportunities, following steep falls in iron ore prices.
KEY FACTS
* At 1206 AEST on Tuesday, the benchmark S&P/ASX200 index was up 72 points, or 1.22 per cent, at 5,970.6 points.
* The broader All Ordinaries index was up 67.4 points, or 1.15 per cent, at 5,937.1 points.
* The June share price index futures contract was 91 points higher at 5,968 points, with 14,300 contracts traded.
* National turnover was 567 million securities worth $1.65 billion.
