ASX Market Wrap: ASX yawns as RBA holds rates steady

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) slipped 0.1%, closing at 4,127.2, ending a two day rally. Sectors were mixed, with the Energy and A-REITs sectors down 1.1% and 0.9% respectively. As Peter Wells of the Australian Financial Review commented “It’s Yawn City out there”, with trade volumes dramatically low.

The Reserve Bank of Australia (RBA) has held interest rates steady, at 3.5%, as the inflation rate dropped to its lowest level since the GFC. The RBA commented that indicators suggest weakening in Europe and a slower pace of growth in China, with the US growing at a modest pace. Looks like the RBA wants to keep some powder dry and leave itself some room to manoeuvre, should global economic conditions weaken further.

The A$ faded slightly against the US dollar, but is trading at just over 102.5 US cents.


Housing prices in Australia’s capital cities have posted their largest monthly rise in more than two years, according to RP Data. Home values rose by 1% in June, with the median dwelling price across all capitals at $460,000. The rise appears to be off the back of last month’s 0.25% interest rate cut.

In a similar vein, building approvals have posted the largest monthly increase since at least 1980, according to The Sydney Morning Herald. Approvals for new houses & apartments rose 27.3% in May, well above consensus forecasts for a 5% rise.

Company News

Woodside  Petroleum Limited (ASX: WPL) today received Foreign Investment Review Board approval for the sale of 14.7% of its giant $30 billion Browse LNG project. Investors gave the announcement the cold shoulder, with Woodside’s share price falling 1.8% to close at $31.25.

Winners and losers

As usual, no matter what the market did, some stocks fell and others rose. Suncorp Group Ltd (ASX: SUN) and Brambles Limited (ASX: BXB) both rose 1.5% to $8.33 and $6.25 respectively.

Among the big names, AMP Limited (ASX: AMP) gained 0.8% to $3.90 and QBE Insurance Group (ASX: QBE) added 1.1%, closing at $13.48 while Rio Tinto Limited (ASX: RIO) and BHP Billiton Limited (ASX: BHP) both rose, with Rio in particular posting a 1.6% jump to close at $57.42.

Westpac Banking Corporation (ASX: WBC) was the only bank showing gains today, up by 9 cents to $21.55, while Australian and New Zealand Banking Group (ASX: ANZ)Commonwealth Bank of Australia  (ASX: CBA) and National Australia Bank (ASX: NAB) shares all posted declines.

Foolish takeaway

A steady day keeps investors away – no, actually I just made that up, but it was a very quiet day on the markets. Bring on tomorrow, Fools!

If you’re in the market for some high yielding ASX shares, look no further than Secure Your Future with 3 Rock-Solid Dividend Stocks. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

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Motley Fool writer/analyst Mike King owns shares in QBE, BHP and Woodside.  The Motley Fool ‘s purpose is to help the world invest, better.  Take Stock  is The Motley Fool’s  free  investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  Click here now  to request  your free subscription , whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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