Aust shares spike on inflation surprise

November 30, 2022 05:15 PM AEDT | By AAPNEWS
Follow us on Google News:
Image source: AAPNEWS

The local share market has bounced back from early losses to hit a fresh six-month high on signs inflation is finally peaking.

The benchmark S&P/ASX200 index had been down by as much as 0.4 per cent on Wednesday morning but quickly gained ground after the Australian Bureau of Statistics reported that consumer prices rose less than expected last month.

The index finished up 30.9 points, or 0.43 per cent, to 7284.2, while the broader All Ordinaries gained 38.7 points, or 0.52 per cent, to 7480.7.

For the month the ASX200 rose 420.7 points, or 6.1 per cent, narrowly beating October as the index's second-best month of the year. It gained 6.4 per cent in March.

Wednesday's gains came after the ABS reported that consumer prices rose 6.9 per cent in the 12 months to October, down from 7.3 per cent in the year to September. Analysts had expected a 7.6 per cent rise for October.

"So this is good - good news for the Aussie share market, which is why we're just four per cent away from the highest level that the Aussie share market has ever been," said Saxo Markets Australian market analyst Jessica Amir.

"The market is thinking, forward looking ahead, that the Reserve Bank of Australia could possibly pause on rate hikes sooner than expected," Ms Amir said.

ANZ economists Catherine Birch and Felicity Emmett said that the data would likely see the Reserve Bank consider the possibility of a pause in its rate hike campaign when the central bank means on Tuesday.

But "given the natural pause in January when the board doesn't meet, we expect another 25bp (basis point interest rate hike) at next week's meeting," they wrote in a research note.

Still, given Wednesday's data, the market now expects a rate cut by the end of 2023, Ms Amir said.

"And on top of that, we are getting some type of good news that China may potentially step in and ease some (COVID) restrictions, so that is supporting miners as well," Ms Amir said.

The mining sector finished up 1.3 per cent, with BHP gaining 1.6 per cent to $45.52 and Rio Tinto rising 1.7 per cent to $109.62, although Fortescue dropped 0.4 per cent to $19.38.

"Australia is expected to ramp up exports of coal and LNG, because we're probably going to have another freezing cold winter in the Northern Hemisphere," Ms Amir said.

Woodside, which delivered its first LNG cargo to Europe since the 1990s on Sunday, climbed 1.3 per cent to $37.29.

The big banks all lost ground, with ANZ dropping 0.7 per cent to $24.74, NAB falling 0.5 per cent to $31.54, Westpac dipping 0.3 per cent to $23.77 and CBA down 0.2 per cent to $107.76.

Insurance companies QBE and Suncorp both dipped by 0.7 per cent while IAG fell 0.4 per cent.

Furniture retailer Temple & Webster soared 14.1 per cent to a two-week high of $5.27 after chief executive Mark Coulter told shareholders at its annual general meeting that sales in November had been running slightly ahead of the same month a year ago.

The Australian dollar was buying 67.00 US cents, from 66.58 US cents at Tuesday's ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index on Wednesday gained 30.9 points, or 0.43 per cent, at 7284.2

* The broader All Ordinaries rose 38.7 points, or 0.52 per cent, to 7480.7

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.00 US cents, from 67.04 US cents at Tuesday's close

* 92.76 Japanese yen, from 92.86 Japanese yen

* 64.74 Euro cents, from 64.55 Euro cents

* 55.93 British pence, from 55.48 British pence

* 107.64 NZ cents, from 107.68 NZ cents.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.



Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK