The Aussie sharemarket started on a weak note and deepened its losses after the ASX 200 shed 1.5 per cent or 111 pts, to 7095.7. A healthy portion of today’s decline came after the Reserve Bank of Australia (RBA) increased the official cash rate by a larger than expected 50 basis points. All sectors finished lower for just the 12th time this year. The interest rate sensitive Tech and Real Estate sectors were the worst performers, falling by 3.0 per cent and 2.95 per cent respectively.
Sandfire Resources (SFR) and Inghams Group (ING) were today’s best performers, after they rose by 3.4 per cent and 3.2 per cent, respectively. Shares of Zip Co (ZIP) fell most, sliding by 14.4 per cent. The buy-now-pay-later company is down 28.4 per cent so far this month.
The Reserve Bank of Australia (RBA) raised the official cash rate by 50 basis points to 0.85 per cent. This is the largest increase in 22 years, and the first back-to-back increase since 2010. The RBA Board says that it will “pay close attention” to the “various influences on consumption as it assesses the appropriate setting of monetary policy”. The Board also “expects to take further steps in the process of normalising monetary conditions in Australia over the months ahead”.
In company news today, Perenti (PRN) released its 2025 strategy update, sending its shares 10.1 per cent higher. In the strategy update, PRN aims to target FY25 revenue of $2.5 billion, an earnings (EBIT) margin of 10 per cent, and a leverage ratio of less than 1. PRN also announced a $520 million contract for Evolution Mining’s (EVN) Cowal Underground project. The contract has a term of four years and will commence in early July 2022.
Fund manager GQG Partners (GQG) fell 1.2 per cent after releasing a funds-under-management (FUM) update. In the update, GQG outlined that its total FUM increased by 4.7 per cent to $94.6 billion in May. The increase in total FUM was driven by a 5.6 per cent jump in its International Equity FUM, to $33.7 billion.
Top Australian Brokers
Telix Pharmaceuticals (TLX) received a $17.25 million research and development tax refund from the Australian Federal Government. Shares fell 0.5 per cent.
4.5bn shares were traded, worth $8bn. 347 stocks finished higher, 1,112 ended lower, while 391 closed unchanged.
In the US, the trade balance and consumer credit data are both scheduled.
Originally published by Divik Nigam – (Author), CommSec