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Australian Market Little Changed Ahead Of RBA Decision

The Australian stock market opened higher on Tuesday following the positive cues overnight from Wall Street amid optimism about a U.S.-China trade agreement. However, the market has pared gains and is now flat as investors turned cautious ahead of the Reserve Bank of Australia's monetary policy decision due later in the day.

The RBA is widely expected to leave its benchmark lending rate unchanged at the record low of 0.75 percent.

The benchmark S&P/ASX 200 Index is down 1.60 points or 0.02 percent to 6,685.30, after touching a high of 6,725.90 earlier. The broader All Ordinaries Index is up 1.60 points or 0.02 percent to 6,801.40. Australian stocks closed higher on Monday.

Among the major miners, BHP Billiton and Rio Tinto are advancing more than 1 percent, while Fortescue Metals is rising 2 percent.

Oil stocks are also mostly higher after crude oil prices rose overnight. Woodside Petroleum is adding almost 1 percent and Oil Search is rising 0.3 percent, while Santos is down 0.2 percent.

In the banking space, ANZ Banking, Commonwealth Bank and National Australia Bank are higher in a range of 0.3 percent to 0.7 percent.

Westpac's shares, coming out of a trading halt, are losing more than 4 percent after the bank said it has completed a A$2 billion share placement to meet regulatory capital requirements. On Monday, the lender reported a 15 percent decrease in full-year cash profit and cut its dividend.

Among gold miners, Evolution Mining is losing almost 3 percent and Newcrest Mining is lower by more than 1 percent after safe-haven gold prices edged lower.

On the economic front, the latest survey from the Australian Industry Group revealed that the services sector in Australia continued to expand in October, and at a faster rate, with a Performances of Services Index score of 54.2. That's up from 51.5 in September and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the Australian dollar is lower against the U.S. dollar on Tuesday. The local currency was quoted at $0.6879, down from $0.6905 on Monday.

On Wall Street, stocks closed at new record closing highs on Monday as traders remain hopeful about a U.S.-China trade agreement, with Commerce Secretary Wilbur Ross expressing optimism phase one of a trade deal could be signed this month. News on the merger-and-acquisition front also generated some positive sentiment, with shares of Wright Medical Group soaring after the medical device maker agreed to be acquired by larger rival Stryker for $30.75 per share in cash.

The Dow climbed 114.75 points or 0.4 percent to 27,462.11, the Nasdaq advanced 46.80 points or 0.6 percent to 8,433.20 and the S&P 500 rose 11.36 points or 0.4 percent to 3,078.27.

The major European markets also showed strong moves to the upside on Monday. While the German DAX Index surged up by 1.4 percent, the French CAC 40 Index jumped by 1.1 and the U.K.'s FTSE 100 Index advanced by 0.9 percent.

Crude oil prices saw some further upside on Monday amid renewed optimism about the outlook for global demand. WTI crude for December delivery rose $0.34 or 0.6 percent to $56.54 a barrel.

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