ASX stages a recovery on tech rebound, RBA eyes inflation peak at 3.75% in June: 0.1% higher at noon

US futures cushioned the blow on the Australian sharemarket as market participants eyed the Reserve Bank statement on monetary policy. Earnings from Amazon impressed Wall St investors in after hours trade, jumping 18 per cent on a beat in its fourth quarter results supported by growth in its cloud unit. The moves followed Facebook’s owner Meta Platforms annihilating Wall St wiping off over US$200 billion, the biggest one-day loss in US stock history.

On the local bourse, the performance is mixed with information technology climbing back slowly after its major sell down, rising 0.8 per cent as the best performer of the session, industrials, and energy rising in the order of 0.5 per cent. There were muted performances in the financials and property sector, though edging higher with materials as the laggard and flat performances from consumer discretionary and staples.

The hawkish tilt from the European Central Bank Christine Lagarde, and a rate hike from the Bank of England showed signs that they are focusing on suppressing hot inflation as they pivot towards the tightening stance of its global peers. To cap off the week of central bank talk, the Reserve Bank of Australia released its Statement of Monetary Policy with forecasts largely shrugged off from investors. The Aussie dollar was steady, while bond yields remained unchanged.

RBA eyes inflation peak at 3.75% in June

The central bank expects GDP growth to peak five per cent in June instead of December this year. The central bank previously tipped the nation’s GDP to peak in December at 5.5 per cent, but now expects December to be 4.25 per cent growth.

The unemployment rate is also expected to fall to 3.75 per cent by the end of the year where previously, it expected it would remain at 4.25 per cent.

In 2023, the RBA is expecting GDP growth to be 2.25 per cent in June before dipping to 2 per cent for December 2023 and June 2024. This was revised down from 3.25 per cent in June 2023 and 2.25 per cent in December 2023.

The RBA is also expecting trimmed mean inflation to exceed its targeted band of 2 to 3 per cent in June, with a forecast it will hit 3.25 per cent before subsiding to 2.75 per cent in December until June 2024.

News Corp impresses, Hub receives tick of approval

Elsewhere, REA Group (ASX:REA) declared a record dividend for the first half of the financial year, after a surge in revenue and profits. Revenue came in 37 per cent higher, EBITDA jumped 27 per cent, while after tax profit grew 31 per cent compared to the same time a year ago. The nation’s largest property listing provider unveiled an interim record dividend of 75 cents per share fully franked, up 27 per cent from the prior year. Shares down 0.1 per cent at $143.90.

The parent of The Australian and The Daily Telegraph, News Corp (ASX:NWS) posted its highest ever quarterly revenue of $2.7 billion, a 13 per cent pop compared to the same time a year ago. Newscorp also co-parents Foxtel with Telstra (ASX:TLS), with the pay tv company celebrating a 19 per cent rise to over 3.9 million paid subscribers primarily due to the Binge and Kayo streaming services. There are now over 1 million Kayo subscribers, compared to 648,000 in the prior year. However, News Corp said revenues in the subscription video services business decreased 3 per cent at $13 million, with rises at the Kayo and Binge businesses offsetting the decline in residential broadcast subscribers. Shares are soaring 4 per cent at $32.82.

The Supreme Court of NSW has approved HUB24's (ASX:HUB) deal to buy accounting software provider Class Limited valued at $386 million. Class expects to lodge an office copy of the Court orders pursuant to section 411(10) of the Corporations Act 2001 with the ASIC watchdog on Monday, at which time the Scheme will become legally effective. Shares are trading 0.6 per cent higher at $25.67.

Chorus (ASX:CNU) has signed new agreements with existing service providers Downer and UCG for its copper and fibre network. The NZ telecommunications company said the contracts will start from April this year for a minimum of three years. Ventia will remain responsible for the remaining fibre rollout to about 40,000 premises and will also complete the West Coast and Southland fibre network extensions and other projects.

In the winner's circle is PointsBet's (ASX:PBH) after its subsidiary,  PointsBet Canada was officially approved as a licensed sportsbook in Ontario with the deal slated to be effective from April 4 this year. 

Major players are mixed in their respective sectors

Beach Energy (ASX:BPT) is up 0.7 per cent at $1.48,Woodside Petroleum (ASX:WPL) eking out a 0.02 gain at $25.98, while Santos (ASX:STO) is bucking the trend, trading 0.5 per cent lower at $7.34.

BHP (ASX:BHP) down 1.1 per cent at $46.55, Rio Tinto (ASX:RIO) declined 0.8 per cent at $113.27, while Fortescue Metals (ASX:FMG) fetched a 0.1 per cent gain at $21.16.

Westpac Banking Corporation (ASX:WBC) rose 2 per cent at $21.50, Macquarie Group (ASX:MQG) is up 1.5 per cent at $192.27, Commonwealth Bank of Australia (ASX:CBA) gained 0.3 per cent at $93.70, but ANZ Banking Group (ASX:ANZ) fell 0.9 per cent at $26.83 and National Australia Bank (ASX:NAB) is trading 0.5 per cent lower at $27.76.

Safe haven gold stocks fell in tandem with the dip in the price of the precious metal. Northern Star (ASX:NST) is down 0.7 per cent at $8.45, Newcrest Mining (ASX:NCM) and Evolution Mining (ASX:EVN) are both down 0.1 per cent.

Can the ASX hold onto today's gains?

Volatility has continued to define the performance in global markets as traders readjust to a shift in monetary policy as we start to move from a pandemic phase to endemic.

At noon, the S&P/ASX 200 is 0.1 per cent or 4 points higher at 7082.20.

The SPI futures are pointing to a rise of 9 points.

Best and worst performers

The best-performing sector is information technology, up 0.8 per cent. The worst-performing sector is materials, down 0.4 per cent.

The best-performing stock in the S&P/ASX 200 is PointsBet Holdings (ASX:PBH), trading 5.1 per cent higher at $5.14. It is followed by shares in Liontown Resources (ASX:LTR) and News Corporation (ASX:NWS).

The worst-performing stock in the S&P/ASX 200 is ARB Corporation (ASX:ARB), trading 5.1 per cent lower at $43.63. It is followed by shares in Adbri (ASX:ABC) and Pinnacle Investment (ASX:PNI).

Commodities and the dollar

Gold is trading at US$1805.77 an ounce.
One Australian dollar is buying 71.41 US cents.