“We started out the day with a lot of optimism,then finished with a bit of reality,” said Adam Dawes,a senior investment advisor at Shaw&Partners. Before the announcement at 2:30 AEST,the ASX200 was trading up 0.08 per cent.
However,tech stocks charged as Dawes said the “top of the hill” for rate hikes was now almost visible.
“There are hints that further tightening by the central bank will probably be the same or even be less aggressive,” he said. “If the Fed are talking to be less aggressive with its further tightening then tech stocks will do well.”
Meanwhile,Yancoal and Whitehaven Coal added to Monday’s gains,with energy prices continuing to rise following Russia’s closure over the weekend of the Nord Stream 1 gas pipeline,one of Europe’s major gas supplies.
As energy stocks continue to lift the market,Dawes said coal prices will remain elevated for the months ahead. Additionally,with the energy crisis in Europe set to worsen over the coming months,large companies like Woodside and Santos will thrive.
“Australia has an abundance of gas - we’ve pretty much got it all spoken for as far as domestically as well as internationally,” Dawes said.
Mining stocks fell 0.7 per cent despite rising in early trade. BHP dropped 1.7 per cent;Rio Tino shed 1.06 per cent;and Amcor slipped 0.68 per cent.
European stocks slumped and the euro fell as the region’s worsening energy crisis added to risks for a global economy already facing high inflation and a wave of monetary tightening.
The Stoxx Europe 600 benchmark dropped after Russia’s Gazprom PJSC halted its key gas pipeline indefinitely,although the benchmark gauge recovered from its worst levels as energy stocks rallied.
Wall Street was closed for the Labor Day holiday but equity futures edged higher after the worst week for world shares since June.
European stocks slumped as its energy crisis worsens.Credit:AP
Tweet of the day:
Quote of the day:
“The bank had flagged more increases,the markets had anticipated and homeowners were expecting it as well,but the fact that we knew it was coming doesn’t make it any easier for people,” Treasurer Jim Chalmers said during question time following the RBA announcement. “This will tighten the screws on family budgets. This will put more pressure on a lot of Australians who are already stretched.”
You may have missed:Former senior banking executive Lyn Cobley is joining the board of the Commonwealth Bank as a non-executive director from October.
Cobley,who has more than three decades in financial services,was previously the head of Westpac’s institutional banking armbefore retiring in 2020,and earlier in her career she was treasurer of CBA.
CBA’s new chairman Paul O’Malley,who took over from former chair Catherine Livingstone last month,also announced Shirish Apte would not be standing for re-election as a non-executive director at CBA’s annual meeting next month.
With Clancy Yates
Bloomberg