RBA unexpectedly hiked rates by 25bp today. Picture Getty
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Share prices dropped instantly after the RBA unexpectedly hiked the cash rate by 25bp to 4.1% this afternoon. At the close of day, the benchmark ASX 200 index was down -1%.
In the accompanying statement, the RBA said although inflation in Australia has passed its peak, 7% is still too high. Meanwhile, wages growth is picking up in response to the tight labour market.
“The RBA Board is still seeking to keep the economy on an even keel as inflation returns to the 2–3 per cent target range, but the path to achieving a soft landing remains a narrow one,” it said.
The central bank also said that “some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe.”
Following the decision, analysts say the second half of the year would be painful for any mortgage holders with a fixed term rate that’s due to expire.
“We’re still seeing around 20% of people looking to refinance coming to us with an LVR (Loan-to-Value ratio) of 80% or more, which locks some homeowners into mortgage prison as they cannot afford to refinance,” said Compare Club’s Chief Operating Officer, Brendan See.
“We’re also probably close to the top of the rate increase cycle and for those that can hold on, there should be some easing over the next year.”
Swipe or scroll to reveal the full table. Click headings to sort.
| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| WHC | Whitehaven Coal | 6.20 | 4.38 | 8,524,645 | $5,187,805,676 |
| NHC | New Hope Corp | 4.99 | 3.85 | 4,848,769 | $4,234,893,490 |
| NEU | Neuren Pharmaceut. | 13.15 | 3.79 | 406,427 | $1,603,587,115 |
| YAL | Yancoal Aust Ltd | 4.60 | 3.72 | 1,804,172 | $5,849,546,706 |
| WBT | Weebit Nano Ltd | 6.57 | 3.63 | 529,485 | $1,181,381,779 |
| SMR | Stanmore Resources | 2.57 | 3.21 | 576,342 | $2,244,465,169 |
| A2M | The A2 Milk Company | 5.49 | 2.72 | 7,407,439 | $3,855,352,983 |
| MP1 | Megaport Limited | 7.36 | 2.65 | 1,141,486 | $1,136,037,500 |
| RSG | Resolute Mining | 0.49 | 2.60 | 6,421,396 | $1,021,923,153 |
| BOE | Boss Energy Ltd | 3.17 | 2.59 | 2,485,998 | $1,089,468,684 |
| PRU | Perseus Mining Ltd | 1.89 | 2.16 | 3,098,042 | $2,530,775,673 |
On the ASX, coal stocks New Hope (ASX:NHC) and Whitehaven (ASX:WHC) rose as they conducted on-market share buybacks.
A2 Milk (ASX:A2M) was up almost 4% after receiving an approval from China’s regulators for the re-registration of a2MC’s China label infant milk formula (IMF) product.
“The approval provides a2MC with continued access to China’s substantial registered domestic infant milk formula market which remains the key focus of our refreshed growth strategy,” said A2M CEO, David Bortolussi.
Swipe or scroll to reveal the full table. Click headings to sort.
| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| EBO | Ebos Group Ltd | 33.83 | -10.67 | 176,994 | $7,255,859,886 |
| ASX | ASX Limited | 60.67 | -10.17 | 1,750,665 | $13,075,417,241 |
| DHG | Domain Holdings Aus | 3.37 | -5.07 | 949,401 | $2,242,382,893 |
| OCL | Objective Corp | 13.59 | -3.75 | 12,520 | $1,344,326,412 |
| LOV | Lovisa Holdings Ltd | 19.92 | -3.58 | 519,443 | $2,227,806,290 |
| SGR | The Star Ent Grp | 1.15 | -3.57 | 6,019,868 | $1,926,230,244 |
| APM | APM Human Services | 2.07 | -3.50 | 186,830 | $1,962,769,364 |
| GNE | Genesis Energy Ltd | 2.49 | -3.49 | 17,432 | $2,748,401,665 |
| TLC | The Lottery Corp | 4.87 | -3.47 | 1,820,949 | $11,217,889,383 |
| COH | Cochlear Limited | 239.67 | -3.46 | 84,199 | $16,316,069,639 |
| MAD | Mader Group Limited | 5.13 | -3.39 | 46,596 | $1,062,000,000 |
| ELD | Elders Limited | 6.35 | -3.13 | 1,354,705 | $1,024,921,560 |
| DEG | De Grey Mining | 1.36 | -3.02 | 1,173,742 | $2,193,439,516 |
| NCM | Newcrest Mining | 26.31 | -2.99 | 2,014,927 | $24,251,537,452 |
| PME | Pro Medicus Limited | 63.26 | -2.89 | 125,778 | $6,802,716,960 |
| NAN | Nanosonics Limited | 5.05 | -2.88 | 340,966 | $1,572,013,570 |
| SHL | Sonic Healthcare | 35.18 | -2.84 | 390,349 | $17,020,775,702 |
| QUB | Qube Holdings Ltd | 2.84 | -2.74 | 7,281,355 | $5,156,026,570 |
Discretionary stocks meanwhile were the worst performers, with the likes of The Lottery Corporation (ASX:TLC) falling by over -3%.
Pharmaceutical distributor EBOS Group (ASX:EBO) fell -9% after being informed by Chemist Warehouse that its supply contract will not be renewed beyond the expiry date of 30 June 2024. Chemist Warehouse will instead sign up Sigma Healthcare (ASX:SIG), which rose by 22% on the news.
Market operator ASX (ASX:ASX) fell -10% after saying that its total expense will blow out by approximately 12% for FY23, and 12% – 15% for FY24, driven by CHESS related regulatory and assurance costs. At the investors meeting, new CEO Helen Lofthouse also outlined the company’s 5-year strategy.
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