ASX Large Caps: ASX pulls back more, RBA leaves rates alone; Nick Scali up 16pc on H1 profit beat

• ASX200 pulls back more on Tuesday in line with Wall Street
• The RBA has kept rates steady at 4.35pc
• Nick Scali surged after reporting solid H1

The ASX200 keeps retreating from its record highs, down again by -0.5% on Tuesday.

The local market tracked a downbeat session on Wall Street overnight, after Fed Chairman Powell told a 60 Minutes interview that market expectations of six rate cuts in 2024 were too optimistic.

Meanwhile, markets did not move much after the RBA expectedly held its rates steady at 4.35%.

Traders also brushed aside the accompanying statement, where the RBA said “further increase in interest rates cannot be ruled out”.

“While recent data indicate that inflation is easing, it remains high. The board expects that it will be some time yet before inflation is sustainably in the target range.

“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks,” said the RBA’s statement.

On the ASX, Energy was the outlier today, finishing in the green in a sea of red.

This was on the back of higher crude prices – which lifted despite a surging US dollar – after news of an attack on a large refinery in Russia and intensified US retaliatory action in the Middle East.

The US dollar is now at a three-month high, and its persistent strength could risk a fall in commodity prices over the short term.

“While it might be compelling to forecast dollar depreciation from the top down, US outperformance in 2024 means that the dollar should remain in high demand,” said Goldman Sachs’s analyst, Isabella Rosenberg.

Across the region, China shares bucked the trend and lifted today, after Beijing rolled out more measures to stem its stock market rout.

Bloomberg reports that China’s sovereign wealth fund will continue to expand its holdings of ETFs listed in the country.

BIG CAP WINNERS

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Nick Scali (ASX:NCK) surged by 16% after surprising the market with its H1 results. Nick reported H1 NPAT of $43m, slightly above the $40-42m guidance provided at the October 2023 AGM.

Group written sales orders for the period were $212.7m, up 1.1% on the pcp.

Nick also declared a fully franked interim dividend of 35 cents per share, which represents a payout ratio of 66%, vs pcp ratio of 53.5%.

Magellan Financial (ASX:MFG) rose +0.5% after reporting an increase in its funds under management (FUM) in January.

As of 31 January 2024, FUM was $36.3 billion, vs $35.8 billion as of 29 December 2023.

BIG CAP LOSERS

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Cochlear (ASX:COH) dropped -6% on no specific news.

Metcash (ASX:MTS) fell -1% after completing a $300m institutional placement of approximately 89.6 million new fully paid ordinary shares at $3.35 per share.

The placement was oversubscribed and generated significant demand from both existing shareholders and new institutional investors.

The market operator, ASX Ltd (ASX:ASX), fell -0.8% after reporting that trading volume on its cash markets (including equities, interest rate and warrant trades) has declined by -12% in January compared to the pcp.