ASX falls ahead of RBA rate outcome led by tech, down 0.8% at noon

Market Reports

by Melissa Darmawan

The Australian sharemarket is weaker ahead of the Reserve Bank of Australia’s interest rate outcome at 2.30pm AEST. The central bank is expected to deliver back-to-back rate hikes for the first time in 12 years.

At noon, the S&P/ASX 200 is down 0.8 per cent or 54 points at 7,153, marking a seven day low. The SPI futures are trading at a deep discount of 70 points, further weighing on sentiment. All the sectors are in the red with information tech leading the fall, down 1.2 per cent. Materials have held up the best.

The best-performing stocks in the ASX 200 are Magellan Financial Group (ASX:MFG), Sandfire Resources (ASX:SFR) and Janus Henderson Group (ASX:JHG).

The jump in treasury yields has led insurance companies higher. QBE (ASX:QBE) is up 0.1 per cent to $12.15 and IAG (ASX:IAG) is trading 0.4 per cent higher to $4.23.

At its Worldwide Developers Conference, Apple unveiled a fee- and interest-free instalment payment option that customers will be able to use anywhere Apple Pay is accepted. The service is being restricted to the US at this stage. Local buy-now pay-later companies earning revenue in America have fallen.

Zip Co (ASX:Z1P) tumbled 10.8 per cent to 68.2 cents to be the worst performer of the session, Block (ASX:SQ2) is down 2 per cent to $113.63 and Sezzle (ASX:SZL) is trading 3.1 per cent lower to 47 cents.
 
Meanwhile, travel stocks are higher with Flight Centre Travel (ASX:FLT) up 0.5 per cent at $20.65, Corporation Travel (ASX:CTD) by 0.4 per cent at $22.18 and Qantas (ASX:QAN), trading 0.9 per cent at $5.37.

Lithium, copper, and nickel stocks have rallied. Oz Minerals (ASX:OZL) is up 0.6 per cent at $24.31, IGO (ASX:IGO) has lifted 0.2 per cent to $11.89, and Lake Resources (ASX:LKE) is trading 5.7 per cent higher to $1.49.

Other stocks leading their sectors lower include Woodside Energy (ASX:WDS), down 0.2 per cent to $32.76, Fortescue Metals Group (ASX:FMG), which has lost 0.7 per cent to $21.25, Evolution Mining (ASX:EVN), down 2.2 per cent to $3.62, and National Australia Bank (ASX:NAB), trading 1.6 per cent lower at $30.63.

Local economic news

The cost of living, inflation and rising interest rates continue to weigh on Australian consumers after the latest ANZ-Roy Morgan index showed that sentiment dropped 3.7 points to 87 in the latest week to its lowest reading since mid August 2020. The survey further revealed that fewer Australians felt better off financially with less than a third expecting to be better off in 12-months time.

Australia's energy crisis is set to worsen cost pressures with consumers facing a bill shock from July as electricity retailers move to sharply raise offer rates. The federal government said there is no quick fix to the crisis with treasurer Jim Chalmers warning families to brace for a difficult and expensive winter. Mr Chalmers also downplayed the prospects for more one-off payments and energy rebates given budget deficit concerns.

Company news

Yancoal’s (ASX:YAL) independent board committee has rejected the $2.5 billion takeover offer from Yankuang Energy, the coal miner’s major shareholder. The deal unveiled on May 30 proposed to buy the remaining 37.7 per cent stake that Yankuang Energy doesn’t own at $5.04 a share (US$3.60), which is a 21 per cent discount to the last traded price of $6.08 a share from the prior session. Shares are trading 3.9 per cent higher at $5.64.

GQG Partners’ (ASX:GQG) funds under management (FUM) rose 4.6 per cent in May over the month to $94.6 billion. The global investment manager attributed its growth from four of its portfolios with international equity contributing almost 34 per cent. Shares are trading 0.9 per cent lower at $1.63.

Telix Pharmaceuticals (ASX:TLX) has received a $17.3 million R&D tax refund for the work taken over 2021 from the federal government. The biotech company is set to use the funds to invest further into the research and development of therapeutic products using molecularly targeted radiation. Shares are trading 1.6 per cent lower at $4.08.

CEO of Kingston Resources' (ASX:KSN) Andrew Corbett is set to speak at the Resources Rising Stars conference in the Gold Coast today. Investors are optimistic on the outlook for Misima as they await further details. Shares are trading 3.9 per cent higher at 13.5 cents.

Commodities and the dollar

Gold is trading at US$1840.25 an ounce.
Iron ore is 2.2 per cent higher at US$146.75 a ton.
Iron ore futures are pointing to a rise of 0.5 per cent.
One Australian dollar is buying 71.74 US cents.

Sources: Bloomberg, Factset
 

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.