ASX rallies 0.5% to six-week high
“A ‘just’ 50 basis point hike by the Bank of Canada reinforced that sentiment.”
Local forecasts go the other way after Wednesday’s above inflation figures. Westpac and Barrenjoey economists have announced an oversized Melbourne Cup rate hike.
Westpac chief economist Bill Evans thinks the Reserve Bank should raise interest rates by 0.5 percentage points on the day of the cut to 3.1%.
Westpac also raised its peak rate forecast to 3.85% from 3.6%.
Barrenjoey is calling for a 0.5 percentage point hike in the cash rate at the Reserve Bank’s policy meeting on Tuesday, saying it will show the RBA is really responsive to incoming data and that “the facts have changed.”
Them&The P/ASX 200 closed up 0.5% or 34.2 points at 6845.1. All Ords also rose 0.5% to 7042.3,
In currency markets, the Australian dollar briefly rose above 65¢ after jumping 1.6% overnight. The surge began after the local CPI beat forecasts, with core inflation rising to 6.1% in the September quarter from a year ago.
The US dollar fell against all major currencies, following a drop in US bond yields following disappointing results from US heavyweights.
Bitcoin rallied to retake $20,000 after weeks below the psychologically important level.
In company news, Pinnacle shares fell 3.4% after the fund management group revealed that its total affiliate funds under management fell 4% or $3.2 billion. to reach $80.5 billion as of September 30.
In a presentation at a Macquarie investor briefing, Pinnacle said the group suffered net outflows during the quarter of $1.2 billion, $200 million in retail net inflows and $200 million. dollars of offshore inflows offsetting $1.6 billion of domestic institutional outflows.
The figure of $80.5 billion is below the consensus estimate of $89 billion for affiliate funds under management by the end of the year. Pinnacle said cash outflows had “a negligible impact on overall management fee revenue overall.”
Retailers had a good day, with JB Hi-Fi gaining 0.4% after posting double-digit sales growth in the first quarter. Super Retail rose 2.7% after posting a 20% increase in sales in the first three months of the new fiscal year.
Fortescue Metals pared earlier gains to 0.4% after shipping a record volume of iron ore in the past three months.
Mining heavyweights Rio Tinto and BHP won. Core Lithium slashed 5.2% after failing to secure a contract with Tesla.
Australian Clinical Labs plunged 5.4% after disclosing a cyberattack at its subsidiary Medlab.
Reece rose 2.2% after announcing a 28.8% increase in revenue for the first quarter of the new fiscal year compared to a year ago. However, chief executive Peter Wilson predicts “a slowdown in demand and a gradual moderation in inflation” in the second half of this financial year.