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Highlights
- The benchmark index ASX 200 fell in opening trade as financials extended losses
- Ten of 11 sectors are lower today; Energy was the only sector trading in green
- Overnight, all three major US indices closed lower amid worries over inflation and growth
Equity markets opened lower on Thursday (9 June 2022) as financials including the top four banks extended losses as investors asses the impact of rising interest rates on the profitability, bad loans of banks. Sentiments turned weak following lower closing of Wall Street indices overnight. The benchmark ASX 200 index fell 0.67% to 7,073.30 points in the initial few minutes of trading on Thursday. The ASX All Ordinaries index was down 0.64% at 7,299.7 points.
On Wednesday, the S&P/ASX200 closed 0.36% higher at 7,121.10 points. Except for Financials sector, all other sectors closed in green yesterday.
Meanwhile, coming to the global equities, US stocks edged lower on Wednesday as investors awaited key data on inflation due Friday and parsed an uncertain outlook for the world economy. The S&P 500 slipped 1.08% at 4,115.77 points, the tech-heavy Nasdaq Composite Index fell 0.73% to 12,086.27 points, while the Dow Jones Industrial Average ended 0.81% lower at 32,910.90 points.
Investors' sentiments have recently been fragile as recession fears are looming large, and high inflation is expected to persist way longer than many economists had initially expected. Besides, slowing growth coupled with soaring prices has raised risks of stagflation- a condition when there is slow economic growth, but prices of goods and services keep on rising. On Tuesday, the World Bank had warned that the economic situation resembles the 1970s stagflation.
Investors are keenly waiting for US consumer price index data, which will be out this Friday and will be a key indicator of whether inflation is weakening.
On the sectoral front, except for Energy, all the other 10 sectors were in the red today. Financial sector was the biggest hit, down over 2% as shares of top banks fell between 2-4% as concerns over non-performing assets (bad loans) rise amid rapidly rising interest rates. A-REIT, Industrials, Utilities, and other sectors also contributed to today's losses in the broader market. But overnight gains in crude oil prices boosted the energy sector. The S&P/ASX 200 Energy (Sector) XEJ was up 0.557% at 11203.000 points.
Market Action:
Coming to the top ASX 200 gainers, Magellan Financial Group Limited (ASX:MFG), Mesoblast Ltd. (ASX:MSB), and Woodside Energy Group Ltd (ASX:WDS) were leading the pack with 3.824%, 2.515%, and 1.784% gains, respectively. On the flip side, Boral Limited (ASX:BLD), and Appen Limited (ASX:APX) were the top losers, falling 4.726% and 4.561%, respectively.
Read More: NHC, YAL, GRR: Three best performing ASX high-yield dividend shares
Newsmakers:
Commonwealth Bank of Australia (ASX:CBA):
Share of ASX-listed financial service provider Commonwealth Bank of Australia remained on investors' radar as the lender increased home loan variable interest rates by 0.50% p.a. in view of the more aggressive RBA tightening cycle and accelerating inflation.
CBA has said that it will also increase the bonus interest rate for select savings products by 0.50% per annum.
Johns Lyng Group Limited (ASX:JLG):
Shares of Johns Lyng Group Limited caught investors' attention on Thursday (9 June) after the ASX-listed company upgraded its revenue and EBITDA forecast for FY22.
The integrated building services provider has upgraded Forecast revenue by $64.6 million to $867.0 million, representing an 8.0% increase over earlier guidance of $802.4 million provided in February 2022. The company has also upgraded its Forecast EBITDA by $4.3 million to $83.0 million, representing a 5.4% increase over earlier guidance of $78.7 million provided in February 2022.
Also Read: Five factors steering Saunders International (ASX:SND) to unabated growth path
