ASX 200 Index: Banks up in a down day, investors eye the Fed

Australian shares edged higher on Wednesday, boosted by strong financials and gold stocks. At the time of writing, the ASX 200 Index is trading down 0.14% to 6,012 from a high of 6,051.

The concerns over the coronavirus remains a weight ahead of what is expected to be a uber dovish Federal Reserve event later today in the US session. 

The FOMC is expected to hold fire after today’s meeting, but markets will be watching the post-meeting press conference closely for comment on risks and options for further easing (04:30 Syd). Many forecasters expect a change in forward guidance on rates at the September meeting,

analysts at Westpac explained. 

Banking sector rallies 2%

Meanwhile, on presumed lower for longer borrowing costs, the financials.AXFJ climbed 2%. Moreover, the country's regulator withdrew a request for brand insurers to freeze dividends due to the novel coronavirus.

Country's top lender Commonwealth Bank of Australia CBA rose over 2.4%, while Australia and New Zealand Banking Group ANZ and Westpac Banking Corp WBC were more than 3% each.

Concerns also lingered over the spike of coronavirus cases in the country, as Australofficials sent an emergency medical team to aged care homes in Melbourne to help contain a rapidly spreading outbreak of infections.

Queensland premier Annastacia Palaszczuk says no one from greater Sydney will be allowed into Queensland from 1 am on Saturday.

Meanwhile, Morrison said the outbreak in Melbourne was impacting the Australian economy.

It is clear that the Victorian wave that Australians are now experiencing – that’s how I honestly have to describe it, there’s not a second wave that’s going across the rest of the country, that is not occurring. There is a significant Victorian wave, but that Victorian wave is impacting the national economy more broadly.

As for domestic data, the Consumer Price Index (CPI) fell 1.9 per cent in the June 2020 quarter according to the Australian Bureau of Statistics (ABS). Chief Economist for the ABS, Bruce Hockman said: "This was the largest quarterly fall in the 72-year history of the CPI."