• ASX 200 finishes 0.30% on Friday and almost 4% for the week
  • Mining stocks lead, Financials and Real Estate lag
  • RBA decision next Tuesday

The ASX finished the day 0.25% ahead of the weekly non-farm payrolls data in the US. For the week, the benchmark ASX 200 index was down almost 4%.

Mining stocks dragged the broader index down as lithium and iron ore miners pulled back.

There are concerns that China’s economy might continue to struggle as Chengdu, a vital transportation hub and a city of 21 million people, became the latest city to be locked down due to a Covid outbreak.

Traders have reacted negatively with oil and iron ore prices once again slumping overnight.

Financials and Real Estate, the two most rates-sensitive sectors, were the best performers today.

The RBA will hand down its rates decision on Tuesday next week, with consensus pointing to another 50bp hike which will take the cash rate to 2.35%.

“With demand still strong in the Australian economy, we look for the RBA to lift the cash rate by 50bps in September to 2.35%, just below estimates of the neutral cash rate,” said Frank Uhlenbruch, investment strategist in the Janus Henderson Australian Fixed Interest team.

Uhlenbruch said there were early signs of moderating inflation, which increased hopes of a dovish pivot by central banks.

“But these hopes were dashed by an unequivocally hawkish speech from the Fed chair at the Jackson Hole symposium towards the end of the month, causing a sell-off in risk markets,” he said.

The European Central Bank (ECB) will also announce its rate decision next week, on Thursday (Euro time). The ECB hiked its rates by 50bp to zero in July, and will be pressured to tame the Eurozone inflation which has just hit a new record high of 9.1% in August.

Meanwhile, PM Albanese has announced changes that would allow aged pensioners to work without being penalised.

“So instead of pensioners having their payments cancelled after 12 weeks if they exceed the income limit, they won’t have to reapply for payments for up to two years. And they’ll retain the pensioner concession card for two years as well,” Albanese said.
 

BIG CAP WINNERS

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Dexus Property (ASX:DXS) was up almost 1% today after reducing its offer price for Collimate Capital from AMP to $275 million (from $300 million).
 

BIG CAP LOSERS

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Calix (ASX:CXL) was the worst performing large cap, down 95% on no specific news.

AMP (ASX:AMP) was down 1.5% as unit holders in the AMP Capital Retail Trust(ACRT) had voted to move management of the trust from AMP to another firm.

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