• Local shares fell 0.25pc despite Wall Street rally
  • RBA minutes suggest more rate hikes to come
  • Australian consumer confidence falls for third straight week

 

The ASX 200 closed -0.25% lower on Tuesday despite the rally on Wall Street overnight.

The index was dragged down by Real Estate, Industrials and Comm Services stocks, while Bank stocks over-performed.

Earlier today, investors digested the RBA’s minutes for the July meeting which suggested that holding interest rates unchanged was the stronger argument compared to raising rates by 25bps .

The contents of the minutes were mostly mixed, but they clearly show that the RBA is worried about allowing inflation to become entrenched, with the ASX falling after the release.

“It would be surprising to not see at least one more ‘insurance’ hike from the RBA in August, with inflation still elevated and the labour market so tight,” said Josh Gilbert, market analyst at eToro.

The minutes also suggested that despite pausing, the Federal Reserve is expected to raise at least once more in the months ahead.

Best performing large cap stock today was mining services company NRW Holdings (ASX:NRW), which rose almost 6% on no specific news.

The worst performer was protective personal equipment maker Ansell (ASX:ANN), which fell 13% after a weak FY24 guidance update (more details below).

Meanwhile, the ANZ-Roy Morgan  consumer confidence index has fallen again for the week to July 13, its third straight week of declines.

According to the report, only 17% of Australians (down 2ppts) say their families are ‘better off’ financially than this time last year compared to 57% (up 4ppts) that say their families are ‘worse off’ financially – a new record high for this indicator in 50 years of interviewing.

Elsewhere, Treasurer Jim Chalmers said he was concerned about the slowdown in China, adding that that it’s “quite remarkable” Beijing is grappling with deflation when other countries are butting heads to contain inflation.

“China is obviously a big piece of the puzzle for us , and so when the data out of China is a bit softer, that is concerning to us,” Chalmers said at the Group of 20 meeting in India.

 

BIG CAP WINNERS

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BIG CAP LOSERS

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Ansell (ASX:ANN) shares plunged after releasing its guidance for FY24. The gloves maker said it was sitting on a glut of unsold products following the pandemic, and will be cutting its workforce. Ansell said it was on track to meet FY23 guidance, but for FY24, Its EPS (earnings per share) guidance would be would be between US92¢ and $US1.12, down from $US1.10 and $US1.20 forecast for FY23.

Transportation company Aurizon (ASX:AZJ) slipped following an investor presentation day where it flagged FY23 EBITDA to come in within the guidance previously provided of between $1,420 million – $1,470 million. For FY24, Aurizon says it will deliver EBITDA within the guidance range of$1,590 million – $1,680 million, albeit towards the lower end due to prolonged wet weather, mine production issues and some labour shortages impacting the March quarter.

Funerals company Invocare (ASX:IVC) fell after saying the takeover proposal from TPG Capital for $13 a share is still in progress. TPG advised shareholders not to take any action at this stage.

Nickel Industries (ASX:NIC) announced that RKEF production for the June quarter was a record 32,558 tonnes of nickel metal, with this result reflecting the ongoing ramp-up of the Oracle Nickel Project (ONI). For the June quarter, ONI produced 10,141 tonnes of nickel metal, a 94.8% increase from the March quarter.

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