• The ASX was up 0.6% on M0nday ahead of the RBA rates decision tomorrow
  • Rate sensitive sectors rallied
  • China downgrades growth, aiming at 5.0% as Li is replaced by Li.

 

Local shares lifted 0.6% on Monday as investors tracked last Friday’s movements on Wall Street.

Despite lots of Fed speak over the past week, it seems clear that US traders have now priced in a full or near-full rates peak.

On the ASX, rate sensitive sectors climbed across the board today, led by Consumer Discretionary, Real Estate and Info Tech.

Coal stocks meanwhile lagged as the benchmark Newcastle coal prices were down another 3% today, extending its 50% loss for the year.

On the macro front, local traders are anxiously awaiting tomorrow’s monthly RBA meeting, which is expected to bring about another 25bp rate hike.

In the last RBA statement in February, the central bank noted that “further increases in interest rates will be needed over the months ahead”.

A hawkish or dovish RBA statement tone tomorrow will signal whether we can expect one or two more hikes from here.

“Any adjustments to the wording of this sentence could be the difference between one or two more hikes from here,” said Matt Simpson, a senior market analyst at City Index .

Meanwhile, the Melbourne Institute’s February inflation gauge eased to 0.4% MoM from 0.9% a month ago, according to data released today.

Elsewhere, China’s National People’s Congress annual session is in full swing.

Outgoing premier Li Keqiang has announced a 5% 2023 GDP growth target for China’s economy. Last year, the target was set at 5.5%, but only 3.0% was ultimately recorded.

In addition, China said it was planning to boost this year’s defence budget by 7.2% following a 7.1% increase in 2022.

Among the ASX advancers today were Liontown Resources (ASX:LTR) and Core Lithium (ASX:CXO) which were up 6% each, and Xero (ASX:XRO) which lifted 4%.

Worst performing large cap was Pushpay (ASX:PPH), which extended its losses by another 7% after shareholders voted to reject a takeover offer by Pegasus Bidco for NZ$1.34 in cash per share announced on Friday.

 

BIG CAP WINNERS

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Magellan Financial (ASX:MFG) was up 1.7% despite reporting a net outflow for February of $0.8 billion, which took its funds under management (FUM) to $45.4 billion.

 

BIG CAP LOSERS

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AMP (ASX:AMP) slipped almost 2% today after exchange operator ASX queried its continuous disclosure practices following a 13.36% fall last month when it announced results. AMP told the ASX the market reaction was partly due to some analysts failing to update their earnings estimates.

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