ASX 200 up 0.53% in early trade amid broad-based gains

Highlights

• The benchmark index ASX 200 was up 0.53% in today's early morning trade at 7,133.40 points
• Nine of 11 sectors traded higher today, where Industrials was the best performing sector
• On Tuesday (7 June), ASX 200 fell 1.53% to close at 7,095.7 after the Reserve Bank of Australia decided to raise cash rates by 50 basis points

Australian equity benchmark ASX 200 opened higher on Wednesday (8 June 2022) following a strong handover from Wall Street indices. The benchmark index was up 0.53% to 7,133.40 points in the initial few minutes of trading on Wednesday (8 June). The ASX All Ordinaries index was up 0.69% at 7,368.8 points.  

On Tuesday, ASX 200 fell 1.53% to close at 7,095.7 points after the Reserve Bank of Australia decided to raise interest rates by 50 basis points (bps), the highest in 22 years. The decision came as a big negative surprise for the investors and led to uncertainty over the quantum of future rate hikes.  As a result, all the 11 sectors ended in red yesterday. 

Meanwhile, coming to the global equities, US stocks extended Monday’s gains, and all the three indices closed higher yesterday also. The S&P 500 climbed 0.95% to 4,160.68 points, while the tech-heavy Nasdaq Composite Index advanced 0.94% to 12,175.23 points. The Dow Jones Industrial Average was up almost 0.80% at 33,180.14 points.

In the last few days, stocks have swung considerably, buffeted by changes in opinions on the economy's strength coupled with recession fears and concerns over interest rate hikes by central banks to tackle inflation. 

Tuesday also saw shares of major retailers like Target and Walmart declining by almost 2.3% and 1.2% after the American retailer Target Corporation said that its profit would decline as it slashes prices to clear out extra inventory. 

Amidst all this, the World Bank slashed its growth forecast for the world economy for this year. With a warning that several years of high inflation are lying ahead, the lender expects global growth to slump to 2.9%, down from the January forecast of 4.1%.

On the sectoral front, nine of 11 sectors traded higher today at the time of drafting this article.  Industrials was the best performing sector. Other sectors that contributed to the gains made on the broader market included Materials, Utilities, Information Technology, Energy, and a few others. The two industries seen in the red zone included the Consumer discretionary and Financials sectors. 

The rise in base metal and oil prices seems to have pushed the materials and energy sector higher today. 

 Read More: Zip (ASX:ZIP) shares plummet over 14% on ASX today, here’s why

Market Action:

Coming to the top ASX 200 gainers, Atlas Arteria (ASX:ALX), Paladin Energy Ltd (ASX:PDN), and Boral Limited (ASX:BLD) were leading the pack with 15.493%, 9.219%, and 5.594% gains, respectively. On the flip side, Charter Hall Long Wale REIT (ASX:CLW), and Domino's Pizza Enterprises Limited (ASX:DMP) were the top losers, falling 1.868% and 1.372%, respectively.

Newsmakers:

APA Group (ASX:APA):

The share price of ASX-listed energy infrastructure company APA Group remained on investors' radar on Wednesday after the group informed that it has successfully raised AU$1 billion of senior unsecured debt through a syndicated loan facility.

The company has said that it has received strong support from more than 20 new and existing financiers, which enabled APA to increase the size of the offering from AU$500 million to AU$1 billion.

Sims Ltd. (ASX:SGM)

Today, the share price of metal and electronic recycling company Sims Ltd. made it to the headlines after the company provided guidance concerning its FY22 financial results. 

The company said that it expects its underlying EBIT for the year ended 30 June 2022 to be in the range of $750 million to $770 million. As per the company, high metal prices and enhanced metal volumes have been the main drivers of improvement over the FY21 result.

Read More: Why LKE, CXO, PRN charged higher on Tuesday