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Market expected to end financial year on a high note

Australian shares are expected to advance on the last trading day of this financial year on optimism that solid earnings growth and lower interest rates for longer will be key themes for investors over the year ahead.

The local benchmark S&P/ASX 200 is expected to climb 8 points or 0.10 per cent when the market resumes on Monday morning, according to the SPI Futures market. The sharemarket is up about 13 per cent since June 30, 2013. The Australian dollar last traded at US94.22¢, up about 2¢ from this time last year.

Most economists expect the Reserve Bank of Australia to keep rates at 2.5 per cent when the board meets on Tuesday.

"No change is odds-on again but we'll be looking for any further confirmation that the board is less confident the current stance of monetary policy is accommodative enough to rebalance the economy," National Australia Bank senior economist David de Garis said.

Morgan Stanley Wealth Management head of investment strategy Malcolm Wood said lower rates for longer would support earnings growth in the year ahead.

The Australian sharemarket closed at 5445.1 points on Friday, roughly the same as mid-2008.