The ASX 200 has closed 0.44% higher at 8,223.5 points after trimming the day’s earlier gains. The pullback in the local market came as Chinese stocks initially rebounded but failed to regain real traction today after diving more than 7% yesterday.
The Materials and Energy sectors were the best performers, while Utilities ended in the red.
Stocks in China and Hong Kong opened higher this morning after the People’s Bank of China said it was moving ahead with a 500-billion-yuan swap facility to provide liquidity for securities, fund and insurance firms for their stock purchases.
Eligible brokers and insurers can now pledge assets such as bonds, stock ETFs and shares of companies listed on the CSI 300 index to obtain liquid assets like Treasury bonds from the central bank.
The roughly US$70.60 billion facility is part of a broader stimulus package introduced in late September.
Rate cuts from February: KPMG
KPMG has reiterated its forecast that the Reserve Bank of Australia (RBA) will begin curing interest rates from February, in response to escalating financial pressures facing Australian households.
Chief economist Dr Brendan Rynne anticipates an initial cut of 25 basis points, followed by four additional reductions, potentially lowering the cash rate to around 3% by early 2026.
Rynne expects the current real cash rate to prove overly restrictive by February, compounded by weak consumer spending “for the foreseeable future”.
He underlined the deteriorating financial conditions for many households, noting that growth in gross disposable income is trailing behind its utilisation.
While Australia may avoid a technical recession, Rynne emphasised that GDP per capita had now declined for six consecutive quarters, reflecting an ongoing fall in living standards.
Rynne added that, “real household disposable income and real household consumption, have also gone backwards in recent quarters, further confirming the challenging economic environment many Australian households and businesses are currently facing.”
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