Jim Chalmers to deliver Budget tonight. Picture Getty
ASX Large Caps: Market down 0.2% ahead of Budget night; banks rise while property stocks drag
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- The ASX closed lower on Tuesday, dragged down by the real estate sector
- Treasurer Jim Chalmers is set to deliver the Fed Budget tonight
- Biden and McCarthy to discuss the all-important US debt ceiling
The ASX finished 0.2% lower today ahead of the Fed Budget night.
Real Estate was the worst performing sector, down over 1%, while Financials rose modestly.
REIT’s Charter Hall (ASX:CQR) led the selldown in property, down by 1.5% and was among the worst performing stocks.
Property stock Goodman Group (ASX: GMG) also fell 1.5%.
The Commonwealth Bank (ASX:CBA) is the latest big bank to report a solid quarter.
CBA’s reported an unaudited $2.6bn profit for Q3, but warned that it won’t be engaging further in mortgage wars against other lenders. The bank has decided to retract its $2000 cashback offers to borrowers. CBA shares rose 0.1%.
Meanwhile, data today shows that Australian retail sales have fallen for a second straight quarter, a sign that rising interest rates are beginning to bite.
Retail sales fell 0.6 per cent in Q1 to $96.17 billion, the ABS said, in line with consensus.
Australian Federal Budget Preview
Treasurer Jim Chalmers has forecast a modest surplus of about $4 billion in tonight’s Budget, from a forecast deficit of $37 billion for 2022-23 made just 7 months ago.
“If it eventuates, this would be the first surplus in 15 years,” Chalmers said.
Highlights are expected to include up to $3 billion power price relief for households, and tax deductions for small businesses to become more energy efficient.
Also on the table is $2.2bn to fund primary healthcare and reform of Medicare, and $14.1bn to fund pay rise for aged care workers.
In Defence, $19bn will be earmarked for the Defence Strategic Review, offset by cuts elsewhere in the Defence budget.
US default on the line
Looking ahead to Wall Street, investors will be closely watching a meeting between President Biden and House Speaker Kevin McCarthy at the White House tonight.
The meeting is to resolve the ongoing impasse over the US debt ceiling, which could have potentially lead to a catastrophic technical default on US treasuries.
US Treasury Secretary Janet Yellen has issued a grave warning that failure by Congress to resolve this could trigger a “constitutional crisis”.
Biden wants Congress to raise the debt ceiling with no conditions, but Republicans said they want budget cuts over the next decade before doing so.
“It’s Congress’ job to do this. If they fail to do it, we will have an economic and financial catastrophe that will be of our own making,” said Yellen.
BIG CAP WINNERS
Swipe or scroll to reveal the full table. Click headings to sort.
| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| HLI | Helia Group Limited | 3.40 | 3.82 | 1,540,736 | $1,113,851,732 |
| EMR | Emerald Res NL | 1.92 | 3.36 | 1,479,426 | $1,104,469,828 |
| CEN | Contact Energy Ltd | 7.43 | 3.05 | 353 | $1,817,115,643 |
| MIN | Mineral Resources. | 73.42 | 2.81 | 806,645 | $13,841,501,345 |
| AKE | Allkem Limited | 12.81 | 2.64 | 3,818,027 | $7,957,972,913 |
| WOR | Worley Limited | 16.41 | 2.50 | 5,087,167 | $8,406,222,800 |
| CIA | Champion Iron Ltd | 6.70 | 2.29 | 909,430 | $3,387,614,975 |
| IFL | Insignia Financial | 3.07 | 2.17 | 1,412,174 | $1,987,794,726 |
| BSL | BlueScope Steel Ltd | 20.22 | 2.04 | 1,108,813 | $9,129,950,668 |
| MQG | Macquarie Group Ltd | 176.90 | 1.96 | 740,354 | $67,053,716,819 |
| LLC | Lendlease Group | 7.94 | 1.86 | 982,002 | $5,369,818,886 |
| GQG | GQG Partners | 1.44 | 1.77 | 446,895 | $4,178,219,689 |
| MCY | Mercury NZ Limited | 6.04 | 1.68 | 13,944 | $8,237,549,707 |
| PLS | Pilbara Min Ltd | 4.68 | 1.63 | 22,530,155 | $13,791,638,106 |
| DOW | Downer EDI Limited | 3.74 | 1.63 | 1,059,499 | $2,471,391,139 |
| VNT | Ventiaservicesgroup | 2.63 | 1.54 | 6,118,687 | $2,215,704,713 |
| IFT | Infratil Limited | 8.64 | 1.53 | 5,651 | $6,161,100,283 |
Engineering firm Worley (ASX:WOR) rose 3% after releasing its Investor Day Presentation pack. Yesterday, Worley reported that it has been selected by Shell to provide services for Sparta, a floating development in the Gulf of Mexico approximately 170 miles off the Louisiana coast.
BIG CAP LOSERS
Swipe or scroll to reveal the full table. Click headings to sort.
| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| SLR | Silver Lake Resource | 1.10 | -6.17 | 7,548,408 | $1,092,449,591 |
| KAR | Karoon Energy Ltd | 2.07 | -3.95 | 1,020,427 | $1,210,016,988 |
| CCP | Credit Corp Group | 16.84 | -3.94 | 164,617 | $1,193,211,986 |
| STX | Strike Energy Ltd | 0.44 | -3.85 | 1,861,645 | $1,142,437,532 |
| PRU | Perseus Mining Ltd | 2.15 | -3.38 | 2,287,012 | $3,036,930,807 |
| CHC | Charter Hall Group | 10.93 | -3.36 | 1,237,016 | $5,349,598,321 |
| NEU | Neuren Pharmaceut. | 13.42 | -3.10 | 206,140 | $1,752,934,613 |
| RSG | Resolute Mining | 0.49 | -2.97 | 11,538,918 | $1,075,148,317 |
| EVT | EVT Limited | 11.76 | -2.89 | 53,871 | $1,953,678,556 |
| ELD | Elders Limited | 7.97 | -2.87 | 1,152,679 | $1,283,107,907 |
| CMM | Capricorn Metals | 4.43 | -2.85 | 338,196 | $1,714,369,278 |
| WBT | Weebit Nano Ltd | 6.93 | -2.81 | 528,762 | $1,324,321,644 |
| JDO | Judo Cap Holdings | 1.22 | -2.80 | 1,133,564 | $1,381,899,840 |
| MGR | Mirvac Group | 2.33 | -2.72 | 6,714,312 | $9,430,605,919 |
Strike Energy (ASX:STX) fell over 4% after saying that it has received final approval to commence the 128 km of 2D seismic for the Eneabba Deep campaign. Terrex Seismic has mobilised and Strike expects acquisition to commence in the next 7-10 days and take 3-weeks.
Silver Lake Resources (ASX:SLR) was down over 5% and was the worst performing large cap on no news.
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