On Tuesday, December 21, 2021, the Australian stock market completed the session higher as investors bought on dips after stocks had fallen substantially in recent trading days. Meanwhile, bargain-buying was aided by minutes from the Reserve Bank of Australia’s policy meeting, which revealed the board’s commitment to keeping highly supportive monetary conditions.
The benchmark S&P/ASX200 index was up 62.89 points, or 0.86 percent, to 7,355.05. The broader All Ordinaries index rose 64.47 points to 7,666.69, or 0.86 percent.
NANOSONICS and ZIP CO. were the best-performing stocks in this index, with gains of 7.46 percent and 5.08 percent, respectively. PILBARA MINERALS and LIONTOWN RESOURCES were the worst performers in this index, falling 9.06 percent and 4.19 percent, respectively.
The best-performing sector was health care, which gained +3.9 percent, while the worst-performing sector was energy, which fell 0.37 percent.
The healthcare sector outperformed the market, with Sonic Healthcare, a medical diagnostics business, finishing at a fresh high of A$ 45.47. After revising guidance owing to increased COVID testing results, ACL jumped 12.2 percent.
Cochlear increased by 3.9 percent, Nanosonics increased by 7.5 percent, and Ramsay Health increased by 3.1 percent to $70.31.
The RBA Board voted to keep the cash rate goal at 10 basis points, the interest rate on Exchange Settlement balances at 0%, and to keep buying government securities at a rate of $4 billion per week until at least mid-February 2022. The Board remains committed to maintaining extremely accommodative monetary conditions in order to accomplish its goals of full employment and target inflation. The Board will not raise the cash rate until actual inflation is consistently within the 2 to 3 percent target range, as previously stated.
This will necessitate a labour market that is sufficiently tight to generate wage growth that is significantly higher than it is now. This will most likely take some time, and the Board is ready to wait. According to the Reserve Bank of Australia’s (RBA) December meeting minutes, the Australian economy was quickly rebounding from the pause in growth caused by the outbreak of the Delta strain of COVID-19. “High vaccination rates and considerable policy support remained to drive the recovery,” it said, adding that the Omicron variant’s development was a new source of worry, but it was not likely to derail the recovery.