SYDNEY, AAP – Investors have taken some money away from the ASX before a Reserve Bank meeting tipped to reset interest rate expectations.
The market was down a little on Tuesday morning as most investors’ attention was fixed on the possibility of the central bank shifting its stance on the timing of a rate rise.
Westpac chief economist Bill Evans said the RBA should abandon its forecast that rates are on hold until 2024.
He said the time of extreme emergency had passed.
Investors in the bond market have pushed yields higher since the annual rate of underlying inflation this month rose to its highest level in six years.
The ASX heavyweight categories of materials and financials were the biggest drags on the market.
Westpac shares were down two and a half of one per cent a day after its improved full-year profit and share buyback news.
The other banks in the big four were down about 0.5 per cent each.
The benchmark S&P/ASX200 index was lower by 27.5 points, or 0.37 per cent, to 7343.3 at 1200 AEDT.
The All Ordinaries was down 24.4 points, or 0.31 per cent, to 7667.8.
US markets closed only a little higher after another batch of quarterly reports in what has been a better-than-expected earnings season.
The Federal Reserve is this week expected to scale back its $US120 billion monthly bond-buying program put in place to help the economy during the coronavirus pandemic.
Investors will also be focused on commentary about interest rates and how sustained the recent surge in inflation is.
In ASX company news, financial services provider Netwealth has unsuccessfully proposed buying Praemium for $785 million.
The Praemium board said the bid did not properly value the company and was not in investors’ best interests.
Praemium shares were higher by more than 14 per cent to $1.43.
Netwealth shares were down about two per cent to $17.10.
Insurance Australia Group has raised its cost estimate for severe weather this financial year after storms and hail damaged several states last month.
IAG increased its natural peril claim costs forecast from $765 million to $1.04 billion, having already increased the allowance significantly on the prior year.
Shares were down more than six per cent to $4.52.
Property giant Goodman raised its full-year earnings forecast and said it was benefiting from a shortage of supply of industrial property.
Earnings per share growth is expected to be more than 15 per cent.
Shares were up more than six per cent to $23.64.
In mining, the big players were all lower. BHP and Rio Tinto lost less than one per cent. Fortescue dropped 1.29 per cent after a gain of almost three per cent on Monday.
The Australian dollar was buying 75.22 US cents at 1200 AEDT, higher from 75.06 cents at Monday’s close.