• ASX slipped 0.50% on Thursday
  • Utilities sector was dragged down by AGL’s earnings
  • All big four banks raised mortgage rates


The ASX slipped half a percent today, dragged down by AGL Energy (ASX:AGL)’s 10% drop, the stock’s worst day since 2007.

AGL sank after reporting an interim bottom-line loss of more than $1 billion while core profit halved to $87m, missing estimates.

The company said the result reflects the impact of plant outages in July, the prolonged Loy Yang Unit 2 major outage caused by a generator rotor defect, and the closure of Liddell Unit 3.

AGL’s new guidance for full year underlying EBITDA is now between $1.25 ~ $1.38 billion, after reporting $1.15 and $1.45 billion previously.

Real estate stocks were also laggards on Thursday, as Charter Hall Long WALE REIT (ASX:CLW) dropped 0.65% despite affirming its guidance of 28¢ per share.

Coal mining stocks were sold as coal prices continue to fall amid a warmer than expected northern hemisphere winter.

The Commonwealth Bank (ASX:CBA) announced it will lift its home loan variable interest rates by 0.25% pa, effective 17 February.

In addition, the bank will increase the interest rates across a number of its savings products, by up to 0.75% p.a.

The CBA joined the other 3 banks (Westpac, ANZ and NAB) in increasing home loan rates by the full 25bp as announced by the RBA earlier this week.

Meanwhile, Wall Street was rattled overnight by comments from Fed Chair of New York John Williams who reminded investors that higher rates may still be needed if financial conditions loosen.

“We still have work to do on raising rates,” Williams said.

“That still seems a very reasonable view of what we’ll need to do this year in order to get supply and demand in balance and bring inflation down.”

Williams also reiterated that if the situation changes, the Fed can move faster than 25bp moves.

Looking ahead to tonight’s session, US initial jobless claims data are due to be released.



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Best performing stocks were:

Mercury NZ (ASX:MCY) rose 3.5% on no news.

IDP Education (ASX:IEL) was up 2% on no news.



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