Miners, IT stocks push ASX 200 1% higher; CIA, PDN jump over 5%

The Australian equity benchmark ASX 200 index ended nearly 1% higher on Wednesday led by miners and Information & Technology shares. Investor sentiment got a boost from the developments happening in the global economy as well as in the domestic economy. Easing Covid-19 restrictions in China and April retail sales data in the US eased slowdown concerns. Meanwhile, lower-than-expected wage growth in Australia gave hopes that the RBA may not be aggressive so far as rate hike is concerned.

The ASX 200 index closed 0.99% or 70.20 points higher at 7,182.70 points. In the last five days, the ASX 200 index has gained 1.67%. Materials and technology stocks stole the show registering impressive gains of 2.51% and 1.91% respectively.

Although markets opened higher tracking positive cues from the global market, wage price index data released earlier in the day kept the momentum going. The numbers released today were 0.7% higher than the March quarter, while expectations were of a 0.8% hike. The 2.4% annual increase in wage index, however, is still the biggest since 2018. But it was far behind the consumer price inflation of 5.1% and has thus led to the believe that the RBA (Reserve Bank of Australia) may not go for 40 basis points hike in interest rates. Furthermore, RBA still forecasts a slow acceleration in wage growth to 2.7% by June turning 3% by year end.

As a result, the Australian dollar dropped 0.2 per cent to US$ 0.7013. The bond yields also lowered, taking the three-year rate down 4 basis points to 3% and the ten-year yield down 3 basis points to 3.4%.

On the global markets side,

In Asia the Hang Seng remained 0.32% higher and in Europe the FTSE 100 was up 0.72% (by 4:12 PM AEST). The global markets seemed to be extending the New York stocks’ rally, while also weighing China Covid trends, Fed rate-hike talk.

How were industrial sectors placed on ASX?

Most sectors closed Wednesday’s trade on a higher note in line with the ASX 200 Index. Materials was the best performer, gaining 2.51%. Following the lead were Information Technology and A-REIT stocks which gained almost 1.91% and 1.86% respectively. On the flipside, Consumer Staples and Financial

sector were the worst performers of today.

Also Read: BlueScope Steel (ASX:BSL) improves earnings guidance, shares gain

Moving on to the market volatility indicator the A-VIX edged sharply down by 3.69% to 16.59. Meanwhile, All Ordinaries Index gained 1.03% to 7,426.60 points. Form the All Ordinaries index, Anteotech Ltd And Weebit Nano Ltd, gained the most-- up 38.30% and 17.62% respectively.

Best and Worst performers of the day

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Other noteworthy shares on the ASX today were,

• Fortescue Metals Group (ASX:FMG)- whose share price moved up over 2.11% to AU$19.780 a share on news of Andrew Forrest taking up the executive chairman role in the business. FMG’s departing boss Gaines will become a brand ambassador and report directly to him from August this year. Mr Forrest is to reportedly continue as the acting CEO until he finds a replacement.
• BHP Group Limited (ASX:BHP)-also grabbed investor’s attention with its decision to enter the potash industry with its Jansen potash project in Canada amid the Russia-Ukraine war. BHP is hoping to make a major disruption to world fertiliser supplies. Last August, BHP had already approved a US$5.7 billion worth of investment for this. BHP share price was up 3.18% to AU$47 a share.
• BlueScope Steel also grabbed some light adding 1.5% to its share price that closed at AU$18.20 a share. The company announced a raise of about 12% to its full-year profit forecast based on strong prices and margins in US.
• Boral Limited- was another stock in action that lost over 3.11% based on a major profit downgrade. BLD share closed trade at AU$3.11each after warning that its earnings were being continuously impacted by heavy rainfall and an increase in energy prices.