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Highlights:
- Food and staples retailer Coles has been on a gaining spree on the ASX since last one year.
- It is usually considered ‘safe’ to put money in companies pertaining to ‘almost always upbeat’ consumer staples sector.
- Consumer staples is believed to have the ability to sail through every challenging market condition.
- At present, the biggest challenge in Australia is the rising inflation and, eventually, the hike in RBA’s interest rates.
Shares of the Australian supermarket Coles Group Limited (ASX:COL) were buzzing in the green territory on Friday morning. The share price of Coles appreciated marginally by 0.371% to AU$18.92 per share at 10:48 AM AEST on the ASX today (5 August).
In last 12 months, Coles’ share price has gone up by 4.3% on the ASX. Meanwhile, Coles’ year-to date-based share price rose by 5.59%. In last six months, the shares have gained 14.09% (as of 10:48 AM AEST on the ASX today).
Why did Coles’ shares open trading in green today?
Today, 7out of the significant 11 sectors, under the ASX 200 index, were spotted strong as of 11:12 AM AEST. These seven sectors also include the Consumer Staples sector that Coles is a part of.
The S&P/ASX 200 Consumer Staples sector (INDEXASX:XSJ) was at 13615.7 points after gaining 94.3 points or 0.697% at 11:12 AM AEST on the ASX today.
Therefore, the sectoral performance could be the reason behind Coles’ share price push on the ASX today, as the company did not share any announcement recently.
Consumer staples stocks are usually considered ‘safe’ for investing during challenging market conditions. It is believed that such stocks can easily defeat every challenge. Therefore, Coles being a consumer staples company, is always looked forward to by investors during such market conditions.
At present, the Australian economy is getting engulfed by rising inflation. Subsequently, the Reserve Bank of Australia (RBA) is also increasing the interest rates.
Recently in the monthly meeting of RBA, the bank determined to raise the interest by another 50 basis points in order to defeat the rising inflation. Moreover, the Central Bank predicted that inflation could touch 7.75% by the end of 2022.
Due to the hike in interest rates, the cash rate also gained to 1.85 points from 1.35 points.
