- The ASX fell 0.70% on Friday, and 1.6% for the week
- Coal stocks were the main laggards as coal prices plunge
- RBA revises inflation forecast upwards
The ASX slipped by 0.70% on Friday and for the week, the index was down 1.6%.
Rate sensitive stocks fell today as the RBA revised its inflation forecast upwards – now expecting it to fall to just 4.3% by the end of the year vs the previous prediction of 3.8%.
The headline CPI rate is currently at 7.8%, and the upward revision today is in response to that strong print in December.
“The board is mindful that a considerable adjustment to interest rates has already been made, and that monetary policy affects activity and inflation with a lag and through different channels,” said the RBA statement.
The RBA also said it will back power bills relief plan to help ease costs.
The bank says electricity and gas prices are expected to increase further in 2023, but will be “dampened” by the federal government’s $1.5 billion relief plan.
Sectors like Tech, Discretionary, and Real Estate – all sensitive to changes in interest rates – fell today after the RBA release.
The consumer staples sector, which isn’t sensitive to rates, was the only one in the green.
Meanwhile, coal stocks plunged with New Hope (ASX:NHC) and Yancoal (ASX:YAN) leading the decliners.
A dwindling demand from China has spurred a run in met coal markets over the last few weeks.
Thermal on the other hand has been falling despite a crunch on supplies out of Newcastle and Queensland due to wet weather and rail issues.
ICE Newcastle coal futures fell 6% overnight by US$13.85/t to US$225.50/t. Front month futures for March were hammered even harder, down 16.4% or US$37.50 to US$191.50/t.
Meanwhile, China’s factory gate prices fell more than expected in January, and the country’s CPI edged higher to 2.1%.
China’s CPI was boosted by a seasonal surge in spending over the Lunar New Year as airfares and movie tickets went up.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| EDV | Endeavour | 6.80 | 2.10 | 3,438,887 | $11,927,926,913 |
| IAG | Insurance Australia | 4.73 | 1.61 | 3,682,185 | $11,392,077,087 |
| TWE | Treasury Wine Estate | 14.40 | 1.73 | 1,983,688 | $10,214,151,690 |
| EBO | Ebos Group Ltd | 40.45 | 1.91 | 14,235 | $7,566,548,395 |
| MTS | Metcash Limited | 4.04 | 1.51 | 1,891,132 | $3,842,855,576 |
| AIZ | Air New Zealand | 0.74 | 1.37 | 874,150 | $2,458,978,950 |
| SYA | Sayona Mining Ltd | 0.25 | 4.26 | 24,394,141 | $2,042,061,727 |
| PSI | Psc Insurance Ltd | 4.71 | 1.95 | 11,447 | $1,636,546,190 |
| DDR | Dicker Data Limited | 8.91 | 2.53 | 619,642 | $1,564,995,370 |
| LFS | Latitude Group | 1.44 | 3.24 | 2,382 | $1,444,511,405 |
| JLG | Johns Lyng Group | 5.57 | 3.34 | 594,245 | $1,407,918,688 |
| ARF | Arena REIT. | 3.85 | 2.81 | 1,607,037 | $1,307,698,581 |
| BRN | Brainchip Ltd | 0.63 | 1.61 | 7,094,954 | $1,095,576,050 |
| UMG | United Malt Group | 3.75 | 5.49 | 583,397 | $1,062,085,929 |
| OBL | Omni Bridgeway Ltd | 3.88 | 4.02 | 133,472 | $1,040,884,382 |
| WBT | Weebit Nano Ltd | 6.15 | 3.36 | 942,085 | $1,033,163,087 |
Treasury Wines (ASX:TWE) lifted 2% on no specific news.
United Malt (ASX:UMG) was up 5% on no news.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| NHC | New Hope | 5.38 | -7.40 | 13,512,455 | $5,125,985,661 |
| DHG | Domain Holdings Aus | 3.04 | -6.75 | 1,952,762 | $2,059,202,319 |
| SQ2 | Block | 108.27 | -6.62 | 183,417 | $3,616,042,905 |
| NWS | News Corp.. | 28.23 | -6.12 | 52,750 | $1,035,907,110 |
| NEC | Nine Entertainment | 2.08 | -5.88 | 3,679,687 | $3,768,919,089 |
| AWC | Alumina Limited | 1.58 | -5.67 | 9,238,628 | $4,860,316,373 |
| CMM | Capricorn Metals | 4.07 | -5.57 | 539,864 | $1,619,517,734 |
| DEG | De Grey Mining | 1.38 | -5.48 | 2,862,590 | $2,279,303,696 |
| BLD | Boral Limited | 3.605 | -5.38 | 5,127,748 | $4,202,766,876 |
| YAL | Yancoal Aust Ltd | 5.5 | -5.01 | 5,840,794 | $7,645,344,340 |
| PNV | Polynovo Limited | 2.195 | -4.98 | 2,167,280 | $1,589,288,785 |
| BKI | BKI Investment Ltd | 1.76 | -4.86 | 627,254 | $1,379,451,042 |
| PRU | Perseus Mining Ltd | 1.9425 | -4.78 | 2,716,620 | $2,789,624,751 |
| GOR | Gold Road Res Ltd | 1.4875 | -4.65 | 2,121,617 | $1,678,753,368 |
| WTC | Wisetech Global Ltd | 54.69 | -4.64 | 402,709 | $18,858,597,383 |
| AGY | Argosy Minerals Ltd | 0.7375 | -4.22 | 5,922,768 | $1,081,393,773 |
REA Group (ASX:REA) fell 3% after reporting a 9% fall in NPAT for the full year to $205 million. The platform’s real estate listings in Sydney plunged 34%, and by 31% in Melbourne.
Domain Holdings (ASX:DHG) did not release any news but slipped 7% on the back of media companies’ earnings.