RBA lifts cash rate to 1.35%, ASX is up 0.6% led by energy stocks

Market Reports

by Melissa Darmawan

The Reserve Bank of Australia has raised the official cash rate by 0.5 per cent which was expected at its July meeting to 1.35 per cent. This is the third meeting in a row where a rate hike was unveiled.

Governor Philip Lowe says the size and timing of future interest rate increases will be guided by the incoming data and the board's assessment of the outlook for inflation and the labour market.

The central bank is committed to returning inflation back to its target of 2 to 3 per cent next year with inflation set to peak later this year. Currently, the annual inflation rate surged to 5.1 per cent in the first quarter of this year. This is what the everyday Australian sees, however, the RBA’s preferred inflation gauge is the trimmed mean consumer price index rose by 3.7 per cent year-on-year, the fastest pace in 12 years in the first quarter.

The ASX 200 jumped on the news from 0.1 per cent, local bond yields ticked lower and the Australian dollar softened against the greenback after hitting a 2-year low on Friday.

At 3pm, the S&P/ASX 200 is 0.6 per cent or 40 points higher at 6,653. The SPI futures are pointing to a rise of 8 points.

Eight sectors are advancing led by energy stocks, up 2.5 per cent, information tech and healthcare both have added 1.3 per cent, followed by communication services. Property is the worst performer, down 1.4 per cent, followed by industrials.

The best-performing stock in the S&P/ASX 200 is Regis Resources (ASX:RRL), trading 10.7 per cent higher at $1.60. It is followed by shares in Brainchip (ASX:BRN) and Life360 (ASX:360).The worst-performing stock in the S&P/ASX 200 is Mirvac Group (ASX:MGR), trading 2.7 per cent lower at $2.02. It is followed by shares in Stockland (ASX:SGP) and Eagers Automotive (ASX:APE).

Macquarie Group (ASX:MQG) has added 1.1 per cent, leading the major banks higher while ANZ Bank (ASX:ANZ) is bucking the trend, down 0.4 per cent.

Fortescue Metals (ASX:FMG) is up 1.4 per cent, followed by BHP Group (ASX:BHP) has added 0.9 per cent to $40.24 and Rio Tinto (ASX:RIO), trading 0.5 per cent at $101.26.

Local economic news

Retail sales in Australia rose by 0.9 per cent month-over-month to another record level of $34.23 billion in May, unrevised from the flash figure and after a final 0.9 per cent gain in April, according to the Australian Bureau of Statistics.

The seasonally adjusted S&P Global Australia Services PMI® Business Activity Index posted at 52.6 in June, down from 53.2 in May.

Consumer confidence fell 1.2 per cent in the previous week, according to ANZ and Roy Morgan.

Company news

Battery materials technology company Altech Chemicals (ASX:ATC) has inked a framework deal with German institute Fraunhofer IKTS. IKTS is seen as one of the leading research centres for battery materials in the world. Shares are trading 11.5 per cent higher to 5.8 cents.

Invictus Energy (ASX:IVZ) has received an updated independent report for their prospective resource at the Mukuyu prospect in the Cabora Bassa project in Zimbabwe. The resource has been upgraded to 20 trillion cubic feet and 845 million barrels of conventional gas condensate. The upgrade marks a 2.7 fold increase on a barrel of oil equivalent basis to the 2019 independent assessment. Shares are trading 17.2 per cent higher to 20.5 cents.

Regis Resources (ASX:RRL) has reported a 20 per cent jump over the quarter in total gold production to 123.9 thousand ounces. This comprises a 24 per cent growth in the company’s Duketon gold production to 92.8 thousand ounces and a 10 per cent lift in Tropicana gold production to 31.1 thousand ounces. Shares are trading 10.7 per cent higher to $1.60.

Video technology company Atomos (ASX:AMS) has posted another record sales result with unaudited revenue in excess of $82 million for financial year 2022. Shares are trading 40 per cent higher to 31.5 cents.

Bubs Australia (ASX:BUB) has been put into a trading halt to allow for an equity raising to take place, consisting of a $32.4 million institutional placement and a $30.6 million entitlement offer.

Chimeric Therapeutics (ASX:CHM) has appointed Cassandra Harrison to the position of vice president clinical operations and data management. Shares are trading 4.1 per cent higher to 10.2 cents.
 
Commodities and the dollar

Gold is trading at US$1811.54 an ounce.
Iron ore is 5.6 per cent lower at US$109.90 a ton.
Iron ore futures are pointing to a rise of 1.7 per cent.
One Australian dollar is buying 68.64 US cents.

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