ASX 200 falls nearly 0.60% as banks drag ahead of RBA’s rate decision

Highlights

• The Australian equity market opened lower today as the benchmark index ASX 200 index was down 0.58% at 7,164.80 points in the opening hours of trading
• All the top four ASX-listed banks slipped into the red ahead of RBA’s interest rate decision
• Investors are keenly waiting for the outcomes of the RBA meeting scheduled today.

Equities opened lower on Tuesday (7 June 2022) in the absence of significant cues from Wall Street as top four banks slipped into the red ahead of Reserve Bank of Australia’s (RBA) interest rate decision later today. The benchmark index ASX 200 was down 0.58% at 7,164.80 points in the initial few minutes of trading. The ASX All Ordinaries index was down 0.39% at 7,404.3 points. 

On Monday, the US stocks closed with minor gains as investors' sentiments were impacted by data and comments on the jobs market and inflation.

All the three US indices closed in the green on Monday. The S&P 500 climbed 0.31% to 4121.43, while the tech-heavy Nasdaq Composite Index advanced 0.40% to 12061.37 points. The Dow Jones Industrial Average was up almost 0.049% at 32,915.78 points. The last few days have witnessed greater market volatility as investors are skeptical if the Federal Reserve tightens its monetary policy and raises rates further to an extend so that the US economy slips into recession.

Meanwhile, China’s removal of Covid-19 restrictions boosted demand outlook while the US government is also mulling lifting some tariffs on China to combat the current high inflation.

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Back home, Australian investors are keenly waiting for the outcome of the RBA meeting, where the central bank is expected to raise key interest rates for the second time in a row this year although there is no consensus on the quantum of rate hike. Meanwhile, it is a known fact that a rise in interest rates makes borrowing difficult, which will likely impact Australia's once-booming housing sector. 

On the sectoral front, at the time of drafting this article, nine of 11 sectors were trading lower today with Materials as the best performing sector. The S&P/ASX 200 Materials (Sector) XMJ was up 0.116% at 18119.100 points.  

Industrials, consumer discretionary, healthcare, and financial, along with other sectors, contributed to today's losses as they were trading in the red. The energy index S&P/ASX 200 Energy (Sector) XEJ was down 0.349% at 10683.400 points. 

Shares of all the big four Australian banks--Commonwealth Bank of Australia, National Australia Bank Ltd, Westpac Banking Corporation, Macquarie Group Ltd—fell between 0.75% to 1.25% ahead of RBA’s rate decision.

Market Action: 

Coming to the top ASX 200 gainers, Sandfire Resources NL (ASX:SFR) and Magellan Financial Group Limited (ASX:MFG) were leading the pack with 3.180% and 2.957% gains, respectively. On the flip side, Clinuvel Pharmaceuticals Ltd. (ASX:CUV) and Life360 (ASX:360) were the top losers, falling 3.200% and 2.736%, respectively.  

Newsmakers: 

Telix Pharmaceuticals Limited (ASX:TLX):

Today, the shares of ASX-listed biotechnology company Telix Pharmaceuticals Limited caught investors' attention after the company revealed that it has received a $17.25M R&D tax refund from the Australian Federal Government. As per the company, this $17.25M R&D tax refund is concerning eligible R&D activities undertaken by the company in the year ended 31 December 2021. 

GQG Partners Inc (ASX:GQG):

Today, the share price of ASX-listed investment management firm GQG Partners Inc (ASX:GQG) is on investors' radar after the company revealed that the Group's funds under management (FUM) rose 4.6%, from US$90.4 billion on 30 April 2022 to US$94.6 billion on 31 May 2022. The company has reported FUM growth for all its four strategies during this period, with its international equity rising from US$31.9 billion to US$33.7 billion. 

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