ASX 200 plunges 1% as investors brace for potential RBA rate hike

Highlights

• The benchmark ASX 200 index fell 0.98% to 7362.2 in the first 10 minutes of trading,
• The US dollar index retraced from 20-year highs and the US equity markets ended sharply lower on Friday.
• All 11 sectors are under bear grip as investors try to lighten their positions ahead of the RBA’s meeting on Tuesday.

The Australian share market plunged at the opening on Monday as investors tried to discount a potential rate hike by the RBA, moving in sync with other central banks to curb surging inflation. The benchmark ASX 200 index fell 0.98% or 72.8 points to 7362.2 in the first 10 minutes of trading, while the ASX All Ordinaries index was down 0.97% to 7,649.8. The A-VIX shot up by 5.75% to 14.86.

The US dollar index retraced a bit from 20-year highs and the US equity markets ended sharply lower on Friday, hammered by investors after the latest economic data and Amazon’s first quarterly loss since 2015.

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Broader market index S&P 500, and NASDAQ Composite indices plunged to their lowest closing this year, concluding the session with the deepest daily losses since 2020.

The NASDAQ Composite lost about 13% to 12,334.64 in April 2022, the worst monthly drop since the global financial meltdown in 2008. The Dow Jones Industrial Average was down 2.77% to 32,977.22, while the S&P 500 took a hit of 3.63% to 4,131.92 on Friday.

Market action

Coming to market action, Tyro Payments Limited (ASX:TYR) and Pilbara Minerals Limited (AXS:PLS) were the top ASX 200 losers, falling 5.57% and 4.56%, respectively in early trade. On the other hand, top stocks trying to keep the market from falling were Qantas Airways Limited (ASX:QAN) and Chalice Mining Limited (ASX:CHN), both gaining 2.85% and 2.44%, respectively.

All 11 sectors are under bear grip as investors try to lighten their positions ahead of the RBA’s meeting on Tuesday. The IT sector is the top loser so far, falling 0.79%, followed by a 0.27% plunge in the materials sector.

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Newsmakers

1. Helloworld Travel Limited (ASX:HLO)

• The company’s total transaction value was recorded at AU$419 million in the March 2022 quarter, up 60% over the same period last year.
• Helloworld reduced its EBITDA loss to AU$1.9 million, from AU$4 million in the March 2021 quarter.
• HLO’s retain business in Australia has delivered a significant growth, with TTV growth of 145% in the reported period.

2. Centuria Office REIT (ASX:COF)

• The company has reinforced FY22 guidance of 18.3 cpu and distribution guidance3 of 16.6 cpu.
• Throughout FY22 (YTD till Q3), the company completed leasing or agreeing to 22,970 sqm across 30 separate deals.
• Portfolio occupancy increased to 94.1% during the reported period.

3. Liontown Resources Limited (ASX:LTR)

• Liontown and LG Energy Solution have executed an agreement for the supply of spodumene concentrate from the Kathleen Valley Lithium Project in WA.
• The deal, which is for an initial 5-year term, expected to commence in 2024, can be extended for a further five years.
• Pricing is determined using a formula-based mechanism referencing market prices for battery-grade Lithium Hydroxide Monohydrate.

4. Aussie Broadband Limited (ASX:ABB)

• During Q3 FY22, the company successfully completed the acquisition of Over the Wire.
• Total sales during Q3 FY22 stood at 697,083, a 42% YoY jump.
• ABB provided a full year EBITDA guidance in the range of AU$27 million to AU$28 million.

5. Crown Resorts Limited (ASX:CWN)

• The Victorian Government has stated that it intends to increase the tax rates for electronic gaming machines at Crown Melbourne from 1 July 2023.
• The change is expected to generate up to AU$30 million per annum in additional revenue for the State.
• The actual impact of the proposed arrangements between Crown and the government on future earnings of the casino giant will depend on various matters.

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