• ASX 200 finished 0.85% higher
  • Tech, Real Estate and Utilities led the sectors
  • Qantas to buy Alliance Aviation for $614m

 

Rates sensitive sectors like Tech, Real Estate and Utilities led the ASX200 index to a higher close today, as fears of  rapid US rate hikes subsided overnight.

The benchmark index lifted 0.80% as US Fed Chairman Jerome Powell signalled that the Fed’s tightening path would not be as aggressive as first thought.

The Fed increased its benchmark rate by 0.5%, and in a press conference meeting, Powell ruled out the possibility of a 75bp hike anytime soon, saying that it “wasn’t something the committee was actively considering.”

Wall Street reacted positively to the comments, with major US stock indices rallying by over 3% – the best one day gains since May 2020.

Back home, the 10 year Aussie government bonds lost 12 basis points to 3.43% on the Fed move, and the Aussie dollar rallied to US 72.5 cents.

All eleven sectors on the ASX rose today with the exception of Financials, which fell marginally by 0.10%.

Meanwhile, Brent crude has traded back above US$110 a barrel as the EU proposed a phased embargo on Russian oil that could turn into a full ban within six months.

EU President Ursula von der Leyen said overnight: “We now propose a ban on Russian oil. This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined.”

“We will make sure that we phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets.”

 

BIG CAP WINNERS

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Charter company Alliance Aviation (ASX:AQZ) rose 22% after Qantas (ASX:QAN) reached a deal to acquire it in a $614m deal.

Qantas announced that it planned to buy the remaining 80% of Alliance by issuing new shares valued at approximately $614m.

Alliance shareholders will be offered one Qantas share worth $4.75 for each Alliance share, which is a 32% premium to Alliance’s volume weighted average price for the past three months.

QBE Insurance (ASX:QBE) rose 5% despite warning of a $75m hit from the Russia-Ukraine war. For Q3, the company also reported a 19% in in gross written premiums.

Major tech companies like WiseTech (ASX:WTC) and Brainchip (ASX:BRN) rose by 10% off the back of general positive sentiment on tech stocks today.

BIG CAP LOSERS

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Fund manager Janus Henderson (ASX:JHG) plunged 13% after its Q1 operating income fell by 45% on pcp, and 21% on the last quarter. Its revenue also declined by US$624m on pcp to US$620m.