AUS
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Highlights
- Australian shares rebounded sharply in opening trade
- Nine of 11 sectors traded higher in today's early morning trade with Energy and Materials stocks leading gains
- As per minutes of the June 2022 monetary policy meeting of RBA, Aussies should be prepared for more interest rate increases
Australian shares rebounded sharply on Tuesday taking cues from international stocks, although US markets were closed on Monday for the Juneteenth public holiday. In the opening few minutes of trading, the benchmark index ASX 200 was up 0.90% at 6,491.30 points. The ASX 200 closed 0.64% lower at 6433.40 points on Monday (20 June).
The ASX all ordinaries index was up 1.23% at 6,690.8 points. The last few days have been very painful for Australian and global investors because of the selloff witnessed on inflation and recession fears following US Federal Reserve’s mammoth 75 basis points rate hike.
European stocks rose strongly on Monday as the pan-European STOXX 600 index STOXX ended up nearly 1.0%. Meanwhile, gains in French shares were capped after President Emmanuel Macron failed to win an absolute majority in the country's parliamentary election. The pan-European STOXX 600 index STOXX closed up nearly 1.0%.
This week, investors will keep an eye on comments from Fed Chair Jerome Powell to Congress on Wednesday as well as on Thursday. The comments from Fed Chairman will likely give investors some clues on the second straight three-quarter-point increase in interest rates in July.
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Latest updates from RBA meet:
Meanwhile, the minutes of the June 2022 monetary policy meeting of the Reserve Bank Board are out today. In its latest updates, the RBA Governor Philip Lowe has stated that Aussies should be prepared for more interest rate increases as the central bank charts its way to tame inflation.
In headline terms, inflation in Australia was 5.1% over the year to the March quarter, highest in many years. Oil prices have increased by 28% since February, and global food prices, including the prices of wheat and vegetable oils, have risen sharply. Petrol prices in Australia are up by 37% over the past year, which according to the RBA, is adding around 1 percentage point to headline inflation.
Newsmakers:
Westpac Banking Corporation (ASX:WBC)
Shares of the banking giant Westpac Banking Corporation have caught investors' attention today as the financial services provider has announced the offer of a new Additional Tier 1 capital instrument, Westpac Capital Notes 9 (Notes) (Offer). As per the announcement, the offer size is approximately AU$750 million. Additionally, with the issue price at AU$100 per note, the Margin is expected to be between 3.40% and 3.60% per annum.
GrainCorp Limited (ASX:GNC)
The share price of the ASX-listed agribusiness company remained on investors' radar on Tuesday (21 June) after the company revealed that its FY22 EBITDA guidance of AU$590 million to AU$670 million represents a 90% increase from FY21. As per the company, this increase in earnings reflects robust global demand for Australian grain, oilseeds & vegetable oils.
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Market Action:
Coming to the top ASX 200 gainers, Novonix Limited (ASX:NVX), Life360 (ASX:360), and Whitehaven Coal Ltd (ASX:WHC) led the pack with 7.692%, 7.307%, and 6.607% gains, respectively. On the flip side, Premier Investment Limited (ASX:PMV), and Bega Cheese Limited (ASX:BGA) were the top losers, falling 3.206% and 2.875%, respectively.
On the sectoral front, nine of 11 sectors traded higher in today's early morning trade. Healthcare and the A-REIT were the only two sectors trading in the red. The two sectors which led the gains included Energy and Materials. Meanwhile, other sectors including Information Technology, Telecommunication Services, Consumer Discretionary, Financials, Utilities and Industrials also traded in the green zone today.
The rise in oil prices seems to have pushed up the energy sector today. Oil prices swung higher on Monday as investors focused on tight supplies over slowing economic growth. Brent crude futures settled up 0.9% at $114.13 per barrel.
