- The ASX 200 closes over 1pc lower on Wednesday
- Energy stocks drag the index
- Australian GDP grows again in first half
Aussie shares are down another 1.40% on Wednesday following last night’s lead from Wall Street.
After losing 4% last week, the ASX is already down 1.5% this week, staring down the lowest level in almost two months.
All 11 sectors except Tech were down as investors weigh up the possibility of more rate hikes in the US.
Overnight, a stronger than expected services sector data fuelled expectations that the Fed might dish out one of its supersized 75bp hikes come September 21st.
Chief Investment Officer at Ariel Investments, Rupal Bhansali, has warned against ‘buying the dip’.
‘Don’t fight the Fed’ still holds true,” said Bhansali.
“Although taking risks has been rewarded over the past decade – this is likely to have consequences over the next decade, as ‘The Fed put’ comes to an end.
“The Fed is now focused on fighting inflation and helping Main Street, not Wall Street,” said Bhansali.
“In my view, it is prudent to consider using the head fake rallies such as those in July and August to reduce exposure to junk bonds and junk equities.
“Junk equities are characterised by what my team at Ariel calls ‘the four Ls’: Loss-Making businesses or Leveraged companies, and stocks with Lofty valuations or Ludicrous expectations,” he added.
Meanwhile, the USD has pushed further up to its highest level in two decades. Right now, the Aussie is trading at US67.15, the lowest level not seen in over two years.
The Australian economy expectedly grew stronger in the first half of the year, an ABS release today has shown.
According to the release, Australian GDP grew 0.9% in the June quarter and 3.6% in 2022. It was the third consecutive quarter of economic growth, driven by a 37% surge in transport services.
Back to the ASX, energy stocks were the worst performers today as oil prices slipped another 3% overnight despite OPEC+ deciding to cut production by about 100,000 barrels per day from October.
Brent has now fallen by around 25% since early June after touching multiyear high peaks in March. The next OPEC+ meeting will be held on October 2nd.
Looking ahead tonight, US trade balance is scheduled to be released while in Europe, Q2 employment and GDP are also due out.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| RMD | ResMed Inc. | 33.46 | 4% | 1,980,256 | $13,284,318,594 |
| FPH | Fisher & Paykel H. | 17.37 | 3% | 502,513 | $9,760,243,429 |
| PXA | Pexagroup | 15.66 | 2% | 260,478 | $2,709,538,041 |
| CXO | Core Lithium | 1.525 | 2% | 18,124,923 | $2,597,107,057 |
| VNT | Ventiaservicesgroup | 2.9 | 3% | 1,267,509 | $2,412,466,135 |
| SYA | Sayona Mining Ltd | 0.275 | 2% | 54,709,050 | $2,240,671,462 |
| LNK | Link Admin Hldg | 4.315 | 3% | 3,453,559 | $2,154,547,420 |
| VUK | Virgin Money Uk PLC | 2.55 | 4% | 6,228,243 | $1,907,088,683 |
| GNC | GrainCorp Limited | 8.26 | 2% | 1,099,318 | $1,811,570,265 |
| ELD | Elders Limited | 11.76 | 2% | 680,246 | $1,796,351,070 |
| BRN | Brainchip Ltd | 0.925 | 2% | 8,197,227 | $1,556,022,740 |
| MP1 | Megaport Limited | 7.425 | 2% | 744,343 | $1,148,278,735 |
| CXL | Calix Limited | 6.48 | 2% | 238,877 | $1,026,171,430 |
Healthcare giants ResMed (ASX:RMD) and Fisher & Paykel Healthcare (ASX:FPH) rose 3-4% on no specific news.
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BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| CHN | Chalice Mining Ltd | 3.83 | -12% | 6,220,146 | $1,644,418,738 |
| IFL | Insignia Financial | 3.15 | -7% | 1,715,843 | $2,210,048,764 |
| VEA | Viva Energy Group | 2.78 | -6% | 3,183,313 | $4,607,926,672 |
| KAR | Karoon Energy Ltd | 2.11 | -5% | 2,813,667 | $1,244,530,335 |
| NHC | New Hope Corporation | 5.44 | -5% | 4,827,561 | $4,761,082,509 |
| NIC | Nickel Industries | 0.8525 | -5% | 16,152,513 | $2,444,489,780 |
| CDA | Codan Limited | 6.07 | -5% | 1,057,713 | $1,154,040,759 |
| DEG | De Grey Mining | 0.92 | -5% | 2,155,674 | $1,361,294,433 |
| BPT | Beach Energy Limited | 1.68 | -5% | 5,246,895 | $4,015,147,235 |
| SLR | Silver Lake Resource | 1.165 | -5% | 3,754,552 | $1,137,472,590 |
| CQE | Charter Hall Soc In | 3.435 | -4% | 1,407,965 | $1,314,956,379 |
| CIA | Champion Iron Ltd | 4.94 | -4% | 2,480,075 | $2,663,544,599 |
| AWC | Alumina Limited | 1.4125 | -4% | 15,224,106 | $4,265,471,683 |
| MEZ | Meridian Energy | 4.43 | -4% | 50,869 | $5,804,658,994 |
| WHC | Whitehaven Coal | 8.485 | -4% | 8,615,980 | $8,415,190,538 |
| WDS | Woodside Energy | 33.85 | -4% | 4,390,252 | $66,608,141,967 |
Mine developer Chalice Mining (ASX:CHN) was down 11% on no news.
Origin Energy (ASX:ORG) and Woodside Energy (ASX:WDS) fell 3% on the back of lower oil prices.