ASX 200 rallies at open as Wall Street ends higher after Fed rate hike

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Highlights

  • The benchmark ASX 200 rallied 0.53% or to 7,343 in the first few minutes of trading.
  • The US Federal Reserve increased interest rates by 50 basis points, the biggest rate hike since 2000.
  • US stocks staged a massive rally while treasury yields lost some earlier gains on Wednesday.

The Australian share market opened on a higher note on Thursday, taking cues from a sharp closing on Wall Street after the US Federal Reserve decided to increase interest rates by 50 basis points, the biggest rate hike since 2000. The benchmark ASX 200 rallied 0.53% or 38.7 points to 7,343 in the first few minutes of trading, while the ASX All Ordinaries index was up 0.59% to 7,609.3. The A-VIX fell 15.65% to 14.28.

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US stocks staged a massive rally while treasury yields lost some earlier gains on Wednesday after the US Fed increased interest rates and said it would begin to reduce its balance in June 2022.

On Wednesday, the Dow Jones Industrial Average jumped 2.81% to 34,061.07, while the S&P 500 gained 2.99% to end at 4,300.16 points. The NASDAQ Composite ended the session 3.19% higher at 12,964.86.

Market action

Data Source: ASX (as of 5 May 2022, 10:30 AM AEST)

Image Description: Top 5 ASX gainers and losers

Image Source: © 2022 Kalkine Media®

Coming to the top ASX 200 performers, Amcor PLC (ASX:AMC) and Chalice Mining Limited (ASX:CHN) were the top gainers, surging 6.86% and 6.02%, respectively. On the flip side, Janus Henderson Group CDI (ASX:JHG) and Harvey Norman Holdings Limited (ASX:HVN) were the top laggards, falling 11.19% and 1.83%, respectively.

Coming to the sectoral performance, ten out of the 11 sectors are trading positive so far. The materials and consumer discretionary sectors are leading the pack with a 0.86% and 0.51% gain, respectively.

Read More: Three ASX fixed income ETFs to explore as rate hikes loom

Newsmakers

  1. AMP Limited (ASX:AMP)
  • AMP Bank witnessed a robust Q1 22, having grown at 2x system growth with the total loan book increasing to AU$22.6 billion during the period.
  • Australian Wealth Management net cash outflows stood at AU$1.3 billion in Q1 22, an improvement over AU$2.0 billion net cash outflows in Q1 21.
  • North inflows from external financial advisers were up 53% to AU$342 million over Q1 21.
  1. Netwealth Group Limited (ASX:NWL)
  • In sync with the RBA interest rate hike, NWL has amended interest payable on cash transaction to 0.65%, from 0.5% previously.
  • Following the RBA’s rate increase of 25 basis points, Netwealth’s cash margin now stands at 75 bps approximately.
  • The current balance of the pooled cash transaction account is approximately AU$4 billion.
  1. Flight Centre Travel Group Limited (ASX:FLT)
  • Flight Centre Travel Group, Goldman Travel Corporation and the Spencer Group of Companies have today launched an innovative new joint venture focused on premium and business travel.
  • The JV aims to work closely with carefully selected independent travel businesses, which are highly regarded in the premium leisure and corporate travel sector in Australia.
  • The JV’s ownership will be divided between all three founding partners.
  1. Perpetual Limited (ASX:PPT)
  • In a Macquarie Australia Conference, the company said it is on track to achieve full-year operating expense growth of 18 to 22%.
  • This implies Perpetual is expected to report AU$556 million to AU$574.6 million in operating expense in FY22.
  • Recently, the company touched a milestone of reaching AU$1 trillion in funds under management via Perpetual Corporate Trust.
  1. Vicinity Centres Trust (ASX:VCX)
  • VCS reported strong financial and operational execution in 3Q FY22, supported by recovery momentum from 1H FY22.
  • Occupancy for the reported period remained stable at 98.2%.
  • The company also confirmed the settlement date for the sale of Runaway Bay Centre, expected on 9 May 2022.

Read More: Three top hedges to shield your portfolio against inflation


 


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