Following a widely expected increase in the cash rate, the Australian sharemarket clawed back a 0.69 per cent loss and secured its sixth straight gain, with the ASX 200 up 5.1pts or 0.07 per cent, to 6998.1.
This is the longest winning streak since late March. Financial stocks (up 0.77 per cent) did much of the heavy lifting, with the Big 4 banks all up. Interest-rate sensitive property stocks (down 1.6 per cent) fell the most, marking the sector’s worst day in almost a month. This was closely followed by a 1.1 per cent decline in the Materials sector – after the release of weaker-than-anticipated manufacturing data across Asia, Europe & the US.
The Reserve Bank of Australia (RBA) raised its official cash rate by 0.50 per cent to 1.85 per cent, the fourth consecutive increase since it started raising rates in May. In its accompanying statement, the Bank said that it expects to take ‘further steps in the process of normalising monetary conditions over the months ahead, but it is not on a pre-set path’.
In other economic news, the value of new home loans to owneroccupiers fell by 3.3 per cent in June, with loans to investors down 6.3 per cent. Refinancing however, soared by 9.8 per cent to a record $12.7
billion June. The number of first home buyers fell 8 per cent in June to be down 32.2 per cent on a year ago, and the number of dwelling approvals decreased by 0.7 per cent in June.
In company news, Credit Corp (CCP) released its annual results. The debt collector posted a 9.7 per cent annual increase in its revenues, and a 9 per cent increase in its profits to $96.2 million. CCP expects
profits in FY23 to be between $90-$97 million. However, CCP expects earnings growth in the US to not be enough to offset the challenges its Australian/New Zealand business is facing. CCP shares managed to
recoup some early-trade losses, but still finished 5.4 per cent lower.
Appen (APX), a data solutions provider, fell 27.3 per cent and had its worst daily decline since February this year. This comes after it highlighted weaker digital advertising demand, and a reduction in its revenue by 7 per cent over the year, to $182.9 million. It also recorded a 69 per cent fall in its currency-adjusted underlying EBITDA, and a $3.8 million underlying net loss. Despite expecting annual EBITDA ‘to be weighted to the second half’, APX says that there has been ‘no improvement in July trading’, with ‘conversion of forward orders to sales’ being ‘less certain this year’.
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In other news, CSL (CSL) expects its acquisition of Swiss-based pharmaceutical company, Vifor Pharma, to be completed by 9 August 2022. CSL shares finished 0.66 per cent higher.
Ramsay Health Care (RHC) announced that its Hospital Purchaser Provider Agreement (HPPA) contract with Bupa has been ‘terminated’. RHC shares shed 0.1 per cent.
3.2bn shares were traded, worth $6.2bn. 650 stocks rose, 748 fell & 383 finished unchanged.
In the US tonight, the JOLTs job openings data is released. Caterpillar, Airbnb, Uber & PayPal are also expected to release earnings results tonight.
Originally published by Divik Nigam – (Author), CommSec
