• The ASX rose around half a percent
  • The RBA hit the pause button on interest rate hikes
  • On the ASX, Finance, Real Estate and Energy stocks led, while Healthcare lagged

 

The ASX 200 rose half a percent on Tuesday as the RBA hit the pause button on interest rate hikes.

The central bank kept the cash rate at 4.1% as widely expected, but warned that further hikes may be necessary to tame inflation.

RBA Governor Phil Lowe said the pause today “will provide some time to assess the impact of the increase in interest rates to date and the economic outlook”.

Andrew Canobi, Director Fixed Income at Franklin Templeton says the RBA is trying to finesse policy to avoid a hard landing.

“It’s a delicate process as policy is already very restrictive in our view, and they could have made a case to lean into the slowdown in inflation from here.”

Canobi says the interesting aspect of today’s decision is that it has a reasonably dovish tone.

“The outlook is conditional from here on upcoming inflation and employment indicators, and their tightening bias has been softened again.  If we see key data ease in July, we may see more conviction emerge that the peak is in.”

On the ASX, Finance, Real Estate and Energy stocks led, while Healthcare lagged.

The property sector got a boost from the RBA decision, with stocks like Mirvac Group (ASX:MGR), Dexus (ASX:DXS), and Lendlease (ASX:LLC) climbing around 1% to 2%.

Elsewhere, China has made a decision to curb exports of key chipmaking metals ahead of a visit by US Treasury Secretary Janet Yellen.

The new measures, announced late Monday, will require Chinese exporters of gallium and germanium compounds to obtain special permission from China’s commerce ministry starting Aug 1st.

 

BIG CAP WINNERS

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NIB Holdings (ASX:NHF) announced that its subsidiary, nib Thrive, has acquired 100% of purpose-built technology platform, Kynd. Kynd is a digital marketplace for people who use Australia’s National Disability Insurance Scheme (NDIS). In 2022, NIB raised $158.1 million to enter the NDIS through a series of series of acquisitions, and now has ~27,000 people registered via the plan management businesses owned by nib Group.

Sayona Mining (ASX:SYA) achieved a new production milestone at its North American Lithium (NAL) operation in Québec, Canada with more than  30,000 tonnes of spodumene (lithium) concentrate produced ahead of target. As of 25 June, the average grade of all spodumene concentrate produced by NAL was approximately  5.5% Li2O, with all key parameters in line with offtake specifications.

Costa Group (ASX:CGC) responded to a recent media speculation in relation to a proposal to acquire Costa Group by Paine Schwartz Partners (PSP). Costa has now confirmed that on 31 May, it received an unsolicited, non-binding proposal from PSP to acquire all of the issued shares in Costa which it does not already own by way of a scheme of arrangement. Under the proposal, Costa shareholders would receive cash consideration of $3.50 per share , with Costa shareholders also entitled to any interim dividend declared in relation to the 6 month period which ended on 2 July of up to 4 cents per share.

Emerald Resources (ASX:EMR) reported that significant gold exploration results have continued at Bullseye, Memot and Okvau Gold Project NearMine Drilling. Significant gold mineralisation from Bullseye’s resource exploration program on the Boundary and Neptune Prospects continues to demonstrate upside potential, including: 15m @ 5.91g/t Au from 291m, and 43m @ 1.17g/t Au from 253m.

 

BIG CAP LOSERS

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