Following the Reserve Bank of Australia’s (RBA) unprecedented decision to raise rates for a fifth straight month, the local sharemarket edged lower despite starting trade in positive territory, with the ASX 200 falling by 25.7 points or 0.38 per cent, to 6826.5. The Tech sector rose the most (+0.67 per cent) and was followed closely by an 0.5 per cent rally in the Energy sector after the OPEC+ group of oil producers agreed to a production cut. Losses however in the Financials (down 0.37 per cent) and Mining (down 0.7 per cent) sectors dragged the index lower. The Utility sector (down 1.9 per cent) also came under pressure, partly due to Origin (ORG) shares (down 3.3 per cent) trading exdividend.
The Reserve Bank of Australia (RBA) today, as anticipated, raised the official cash rate by 50 basis points (0.5 per cent) to 2.35 per cent – a 7½ year high. This is the fifth straight rate hike, and the fourth time in a row the RBA has raised rates by 50 basis points. The RBA “expects to increase interest rates further over the months ahead, but it is not on a pre-set path.”
Super Retail Group (SUL), the operator of Rebel Sports, was the worst performer after its shares fell by 6.2 per cent – the biggest decline since February. This comes after the retailer traded exdividend. Its 43 cents-per-share final dividend is expected to be paid to eligible shareholders on October 17.
Magellan Financial Group (MFG) released a funds-undermanagement (FUM) update for August today. Its total FUM fell by 4.3 per cent to A$57.6 billion, driven by a 5.3 per cent decline in Retail FUM to A$21.4 billion, and a 3.7 per cent fall in its Institutional FUM to A$36.2 billion. Shares of the fund-manager closed 2 per cent lower.
Seven West Media (SWM) shares rose by 3.2 per cent. This comes after the media company secured AFL media broadcasting rights to 2031. Managing Director & CEO James Warburton says that “SWM will be ideally positioned to drive and capture a significant share of the growing total television market”.
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Other stocks that traded ex-dividend and weighed on the market include CSL Group (CSL), Sonic Healthcare (SHL), Northern Star (NST), Nickel Industries (NIC) and BlueScope (BSL).
In other economic news, the current account surplus in Australia rose by $15.6 billion to $18.3 billion in the June quarter 2022. It was the 13th consecutive surplus, the longest quarterly stretch on record.
3.5bn shares were traded, worth $6.5bn. 658 stocks rose, 668 fell & 407 finished unchanged.
In the US tonight, the ISM services index is issued.
Originally published by Divik Nigam – (Author, CommSec
