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Aussie shares ease from record levels

Steven DeareAAP
The ASX has eased from the record high scaled the previous day.
Camera IconThe ASX has eased from the record high scaled the previous day. Credit: AAP

Investors had a momentary spat about a Reserve Bank decision not to maintain the same support for a coronavirus-ravaged economy, and the ASX eased from record highs.

Many economists had tipped recent coronavirus lockdowns across the nation would prompt the RBA to defer easing its bond buying.

The central bank in July vowed to reduce bond buying to $4 billion a week from early September, from $5 billion currently.

The RBA on Tuesday kept to its decision, and maintained the record low cash rate of 0.1 per cent.

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While Governor Philip Lowe said a rise in unemployment was likely soon due to lockdowns, he said the economy had bounced back in the past.

Pepperstone chief market strategist Chris Weston said Mr Lowe was looking through the lockdown period and expecting economic recovery heading into 2022.

Mr Weston said investors had hoped for more support from the RBA.

Bond buying took bonds out of the market, he said, and encouraged investors to take risk in places like the share market.

Bond buying also kept yields low, and the currency value low, he said.

The ASX was trading lower prior to the RBA's monthly statement, and slipped to its lowest level of the day soon after.

Currency traders liked the optimistic outlook and the prospect for rate rises.

Nomura senior economist Andrew Ticehurst noted the bank's forecast for the economy to grow by a little more than four per cent during 2022.

The long-term forecasts were pretty upbeat, he said.

Investors pushed the Aussie dollar from about 73 US cents to its highest level of the day, 74.09 US cents.

The ASX late in trade recovered from its low level but still closed down.

The benchmark S&P/ASX200 index closed lower by 16.9 points, or 0.23 per cent, to 7474.5.

The fall follows a record high for the index on Monday.

The All Ordinaries on Tuesday closed down 10 points, or 0.13 per cent, to 7750.5.

The big banks and miners were all lower.

US markets closed mostly lower too after Federal Reserve Governor Christopher Waller said the central bank could start to reduce its support for the economy by October.

This would depend on whether the next two monthly jobs reports each show employment rising by 800,000 to 1 million, he said.

In ASX company moves, Afterpay gained 11.37 per cent to $127.85 after news the previous day of US payments provider Square's $39 billion takeover bid.

Investors also continued pursuing chief Afterpay rival Zip. Its shares rose 7.46 per cent to $7.78.

Crown Resorts said the boss of its Melbourne business Xavier Walsh would step down on August 20 and leave the company in December.

An inquiry heard Mr Walsh knew Crown Melbourne underpaid millions in Victorian gaming taxes for three years but did nothing about it until the day after a royal commission was declared.

Shares were up 1.68 per cent to $9.08.

About 2500 Qantas and Jetstar employees will be stood down for two months because of coronavirus border closures.

Domestic pilots, cabin crew and airport workers will be stood down, mostly in NSW, but won't lose their jobs.

Qantas boss Alan Joyce expects borders to remain closed for at least another two months due to Greater Sydney's COVID-19 lockdown.

Shares were lower by 0.88 per cent to $4.52.

Brickworks is buying the largest independently owned brick distributor in the US for $70 million.

Brickworks' purchase of The Illinois Brick Company will provide a direct distribution presence in the midwest region.

Shares were up 0.57 per cent to $24.55.

The Australian dollar was buying 73.99 US cents at 1731 AEST, higher from 73.48 US cents at Monday's close.

ON THE ASX

* The benchmark S&P/ASX200 index closed lower by 16.9 points, or 0.23 per cent, to 7474.5 on Tuesday.

* The All Ordinaries closed down 10 points, or 0.13 per cent, to 7750.5.

* At 1731 AEST, the SPI200 futures index was higher by two points, or 0.03 per cent, at 7374 points.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 73.99 US cents, from 73.48 cents on Monday

* 80.74 Japanese yen, from 80.70 yen

* 62.29 Euro cents, from 61.89 cents

* 53.20 British pence, from 52.81 pence

* 105.52 NZ cents, from 105.42 cents.

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