ASX 200, All Ords Market Roundup, Banking and Technology Down, Mining Up

Australian shares closed on a somber note on Monday, with the banking sector leading the downturn as the latest U.S. inflation figures led investors to temper expectations for rate cuts. The ASX 200 index concluded the trading day 0.46% lower, settling at 7,752.5 points. The All Ords Index has also fallen 0.5%, down from 8050.20 to 8009,40 points. This sentiment was underpinned by global geopolitical tensions and anxieties over potential interest rate hikes (or extended holds), which cast a shadow over  enthusiasm and prompted a re-evaluation of risk across the trading floor.

US inflation rates have risen to 3.48% compared to last month’s 3.15%. This has had a knock on effect globally as The Commonwealth Bank of Australia (ASX:CBA), the nation’s leading lender, saw its shares depreciate by 1.38%. The Reserve Bank of Australia (RBA) seem poised to maintain the current interest rates until November according to a poll. Of 32 economists, 13 said November, two June, eight August, four  September, and five February 2025.

However, it was not all gloomy for the Aussie markets as certain sectors capitalised on the unnerved market environment. The Resources (XJR) and Energy (XEJ) sectors stood out, they were up 0.52% and 0.38% respectively. This was galvanised by a surge in base metals and energy prices on Monday . These traditionally defensive industries typically gain from geopolitical unrest and economic volatility, underscoring their essential role in times of uncertainty. Healthcare (XHJ) companies did not escape the downturn, witnessing a 1% drop in their sector.

Conversely, not all sectors could hold their ground. Information Technology (XIJ) and sectors witnessed a backslide, at a 1.75% decline and also Gold (XGD) a 0.36% drop. The Gold sector, despite its conventional status as a safe haven, seemed to suffer from profit-taking maneuvers as investors cashed in on its recent bullish run. This suggests that the uptrend in gold prices may have tempted holders to lock in their gains, contributing to the day’s losses. The mining sector (XMM) experienced some reprieve, enjoying a 0.5% upturn amid rising base metal prices, with investors’ eyes set on the forthcoming economic growth data from China, which could potentially signal further demand.

Across the Tasman Sea, New Zealand’s equities also experienced a modest slide, with the benchmark NZX 50 index edging down 0.12% to conclude at 11,916.78 points.

Market analysts are closely observing the ASX 200 as it teeters on key technical support levels. A sustained breach below these might signal a deeper sell-off, as the technical indicators are often construed as measures of investor confidence and market momentum. The psychological impact of such technical breakdowns cannot be overstated, as they may herald a shift towards a bearish investor outlook.

Among individual stocks, notable price movements were evident. Alumina (AWC) enjoyed a robust climb, ending the day up by a solid 6.0%. Meanwhile, Gold Road Resources (GOR) and Predictive Discovery (PDI) grappled with significant setbacks, descending by 6.59% and a staggering 12.0% respectively. These movements reflect the nuanced performance across different industry groups and individual companies, evincing the diverse responses to the prevailing economic conditions. . Rio Tinto shares also performed well on the day, but it was more difficult to find the green names than it was the red ones.

Looking ahead, economic data releases with the potential to stir the markets are brewing, with metrics from the USA Core Retail Sales and a battery of Chinese economic indicators including New Home Prices, Industrial Production, GDP, Retail Sales, Fixed Asset Investment, and Unemployment Rate are on the docket, any of which could either exacerbate or alleviate the prevailing market jitters.

While prevailing rate concerns and Middle East tensions roiled much of the market, the metals and energy shares provided a glimmer of resilience. As global factors continue to influence local markets, the coming week’s economic data will likely play a pivotal role in charting the course for the ASX and the wider investment landscape.

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