• ASX 200 starts October with a rise of ahead of the RBA decision tomorrow
  • Energy and Utilities gain, while Tech slumps
  • Oil surges 3% in Asian hours on OPEC+ rumours

 

Local shares had a mixed day to start the month off, with the ASX 200 finishing flattish, down by 0.2%.

Negative sentiment in the markets has broadly persisted as Wall Street closed out one of its worst Septembers in the last 20 years.

But trading volumes in Asia were somewhat muted today due to the holidays in Sydney, Seoul, and the start of the Golden Week holiday in China.

Oil price surged 3% in the last few hours as OPEC+ was reported to be considering an output cut of more than a million barrels a day when the cartel meets on Wednesday (EU time).

The week will also bring lots of crucial data points as well as critical announcements for investors.

Tomorrow (Tuesday), the RBA will announce its next rates move, and the big question will be whether the central bank raises rates by 25 or 50 bps.

“It will be a close call between the two, given a slew of economic data in the last few weeks,” says Josh Gilbert, Market Analyst at eToro.

Gilbert says the RBA’s tone seems to suggest they are ready to slow the pace of their hikes, but a look at other economies indicates that more work is likely needed to squash inflation altogether.

“Compared to the rest of the world, Australian households are some of the most indebted in the world, meaning the RBA is unlikely to raise rates as aggressively as other economies, given the pain it would cause local households,” he added.

On Thursday, the Australian balance of trade for August is scheduled while on Friday (US time), the non-Farm Payrolls will give us a look into the US job market.

“If we begin to see a weakening jobs market and lower wage growth, it may give the Fed an option to slowly ease back on its aggressive tightening policy,” said Gilbert.

On the ASX, energy and utility stocks were mainly higher with Yancoal (ASX:YAN) and Origin Energy (ASX:ORG) showing gains of around 2%. Tech stocks were the worst performing, down by 1%.

And after a terrible week last week, Bitcoin is stabilising at around US$19,200 as yields began to retreat on Friday and today.

“Bitcoin’s hodlers remain unfazed and if Wall Street avoids any major de-risking moments, the world’s largest crypto could continue to stabilise here,” said OANDA analyst, Edward Moya.

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Yancoal (ASX:YAN) rose 4% after saying that it intends to prepay US$1 billion of debt from available cash on 4 October. The prepayment consists of payment toward Yancoal’s Syndicated Facility and its unsecured related-party loans.

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West African Resources (ASX:WAF) lost 9% after giving an update in its Burkina Faso Operations.

WAF updated the market about the change in the military leadership in Burkina Faso over the weekend, and that its staff and contractors are all safe.

WAF also said its Sanbrado Gold operations will continue to operate as normal, while the communities around WAF’s operations remain calm.
Liontown Resources (ASX:LTR) fell 3% after receiving approval for the commencement of major site works at its operation in Kathleen Valley.

Following this approval, LTR says it intends to to ramp up contruction works over the remainder of 2022 and in early 2023.

Core Lithium (ASX:CXO) dropped 5% after completing a $100 million cap raise placement at $1.03 a share.

Janus Henderson (ASX:JHG)  also fell 5% after announcing changes to its board, including the retirement of chairman Richard Gillingwater.

Meanwhile, the company announced the appointments of Alison Quirk, Anne Sheehan, and John Cassaday as new independent non-executive directors.

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