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Highlights
- Today, the benchmark index ASX 200 closed 0.36% higher at 7,121.10 points.
- 10 of 11 sectors ended higher, with financials the only sector to close in red.
- Energy sector was the top performer as the S&P/ASX 200 Energy (Sector) XEJ ended 4.229% higher at 11140.900 points.
After the Reserve Bank of Australia’s (RBA) surprise yesterday of raising interest rates by 50 basis points, investors seem to be speculating additional tightening of monetary policy by the Federal Reserve with an announcement of rate hike likely soon. All eyes are also set on the US Consumer Price Index data, which will be out this Friday. The US consumer price index data for May will be an important indicator of whether inflation is weakening.
Amidst this, what has come as a disappointment for investors is the World Bank report, where the lender has slashed its growth forecast for the global economy by a hefty 1.2 percentage points for this year. Global growth is expected to slump to 2.9%, down from the January forecast of 4.1%.
How did ASX 200 perform?
Yesterday, the Australian share market collapsed after the RBA announced a rate hike. Today, Australian equities rebounded strongly as the benchmark index ASX 200 was up 0.53% at 7,133.40 points in the initial few minutes of trading, following strong cues from Wall Street.
Nine of 11 sectors traded higher in the early morning trade. Industrials was the top-performing sector. The two sectors in the red zone were consumer discretionary and financials.
Eventually, at market close, the ASX 200 settled 0.36% higher at 7,121.10 points. Over the last five days, the index has fallen 1.56%. Ten of 11 sectors ended higher in today’s session, with financials being the only sector to close in red.
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The energy sector was the top performer, followed by the utilities, materials, information technology and others which contributed to the gains made by the overall market in today’s trade. The S&P/ASX 200 Financials (Sector) XFJ closed 2.673% lower at 6193.500 points, while the top performer, S&P/ASX 200 Energy (Sector) XEJ, ended 4.229% higher at 11140.900 points.
The rise in oil and gold prices seems to have pushed up two sectors - energy and materials higher today. Oil prices were driven up by various factors- including supply concerns, the absence of a nuclear deal with Iran, and the possibility of higher demand after China relaxes Covid-19 restrictions.
Who gained? Who lost?
Coming to the top ASX 200 gainers, Atlas Arteria (ASX:ALX), Boral Limited (ASX:BLD), and Paladin Energy Ltd (ASX:PDN) led the pack with 16.197%, 14.685%, and 13.475% gains respectively. On the flip side, Bendigo and Adelaide Bank Limited (ASX:BEN), Westpac Banking Corporation (ASX:WBC) and Commonwealth Bank of Australia (ASX:CBA) were the top losers, falling 7.191%, 6.109% and 4.404%, respectively.
Asian and global market
In line with their past day's performance, the US stocks fared well in the overnight trading session on Tuesday, and all the three indices ended higher. The S&P 500 jumped 0.95% to 4,160.68 points, while the tech-heavy Nasdaq Composite Index was up 0.94% to 12,175.23 points. The Dow Jones Industrial Average advanced almost 0.80% at 33,180.14 points.
European shares declined as investors' sentiments were low given the aggressive monetary stance by central banks to calm down unabated inflation, while US retail stocks such as Walmart and Target Corporation declined after Target stated that its profit would drop as it cancels orders to get rid of extra inventory. The pan-European STOXX 600 index came down 0.3% in yesterday's trade.
Meanwhile, Chinese equities ended higher, driven by gains in consumer stocks as there were hopes of a demand recovery as the country is further lifting its Covid-19 restrictions.
Today, Asian stocks rose, boosted by the rally on Wall Street. However, gains were kept in check with concerns that the aggressive policy stance by the central bank will suppress global growth, thus increasing the risks of stagflation.
