The Aussie sharemarket followed Wall Street into negative territory today, down by 0.98%, as RBA boss Phil Lowe told Parliament that a rate hike in 2022 is ‘plausible’.
This came as US stock markets were rocked overnight after another red-hot CPI print that saw headline inflation rising by 7.5%, the highest level in 40 years.
The market has now upped the chances of six Fed rate hikes this year — with a 0.50% increase in March and 1.5% by year end.
Speaking in Australian parliament today, RBA governor Dr. Philip Lowe gave a worrying caution to the market, saying that financial markets could be at risk of a sudden jolt if the US Fed is forced to raise interest rates faster.
Dr. Lowe also signalled a ‘plausible’ hike in Aussie rates later this year, reiterating that it would all depend on data. Lowe said a 2.5% rate could be the eventual target for the central bank over the coming years.
“So if we just get to a zero real interest rate, then the cash rate would have to average at least 2.5 per cent because that’s what we want inflation to average,” he told Parliament.
Meanwhile, all ASX sectors were down today except for Mining.
Tech, Real Estate, and Utilities – sectors which are sensitive to interest rate rises – were sold off by more than 2% each.
The benchmark index was up 1.36% for the week.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| URW | Unibail-Rodamco-Westfield | 5.61 | 6.7% | 3,168,744 | $1,025,972,363 |
| YAL | Yancoal Aust Ltd | 3.17 | 4.6% | 280,409 | $4,000,931,494 |
| IAG | Insurance Australia | 4.74 | 4.2% | 14,483,826 | $11,216,205,937 |
| ABR | American Pacific | 2.63 | 4.0% | 362,985 | $1,056,743,713 |
| RIO | Rio Tinto Limited | 122.64 | 3.1% | 1,432,581 | $44,159,880,817 |
| ALQ | ALS Ltd | 12.28 | 2.5% | 1,170,230 | $5,794,861,901 |
| FMG | Fortescue Metals Grp | 22.83 | 2.5% | 8,006,641 | $68,599,338,373 |
| FCL | Fineos Corp Hold PLC | 3.77 | 2.2% | 71,289 | $1,176,861,892 |
| SDR | Siteminder | 6.35 | 2.1% | 393,833 | $1,690,364,361 |
| FLT | Flight Centre Travel | 20.895 | 1.8% | 2,691,001 | $4,098,495,033 |
| BHP | BHP Group Limited | 48.84 | 1.2% | 8,694,871 | $244,408,963,613 |
| MPL | Medibank Private Ltd | 3.185 | 1.1% | 6,174,793 | $8,675,110,206 |
| LFS | Latitude Group | 1.985 | 1.0% | 29,827 | $2,040,576,922 |
| SUN | Suncorp Group Ltd | 12.1 | 1.0% | 6,168,718 | $15,126,007,612 |
| CIA | Champion Iron Ltd | 7.12 | 0.8% | 1,382,753 | $3,576,679,845 |
Despite the sluggish real estate sector today, Unibail-Roadamco-Westfield (ASX:URW) rose 7% after agreeing to the sale of a 45% stake in Westfield Carré Sénart in Paris to Societe Generale and BNP Paribas. The implied offer price is in line with the last appraisal value of around €1 billion.
Insurer IAG (ASX:IAG) rose 4% after it lifted guidance on the amount of premiums it anticipates this year, based on rising home prices and car insurance. The insurer, which owns NRMA, had earlier cut its dividends as interim profits fell 62% to $176m.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| IEL | Idp Education Ltd | 28.67 | -7.6% | 1,132,566 | $8,636,772,627 |
| TLX | Telix Pharmaceutical | 6.38 | -7.1% | 1,167,859 | $2,117,335,243 |
| Z1P | Zip Co Ltd. | 2.855 | -7.0% | 10,162,600 | $1,807,723,094 |
| CTT | Cettire | 2.69 | -6.6% | 707,684 | $1,097,966,074 |
| SQ2 | Block | 147.82 | -6.4% | 170,150 | $15,070,670,512 |
| PDN | Paladin Energy Ltd | 0.74 | -6.3% | 12,976,168 | $2,116,363,380 |
| 360 | Life360 Inc. | 7.62 | -6.2% | 1,484,846 | $1,487,892,186 |
| CHC | Charter Hall Group | 15.84 | -6.0% | 1,583,451 | $7,970,002,803 |
| PBH | Pointsbet Holdings | 4.9 | -6.0% | 1,612,741 | $1,373,351,467 |
| MP1 | Megaport Limited | 13.78 | -5.9% | 2,017,773 | $2,311,591,021 |
| SWM | Seven West Media Ltd | 0.7525 | -5.9% | 5,044,965 | $1,272,094,591 |
| APX | Appen Limited | 8.48 | -5.7% | 1,490,551 | $1,106,443,495 |
| IFT | Infratil Limited | 7.19 | -5.3% | 41,563 | $5,504,073,506 |
| AGL | AGL Energy Limited. | 6.89 | -5.2% | 7,195,006 | $4,786,416,450 |
| ARB | ARB Corporation. | 43.87 | -5.2% | 219,973 | $3,779,127,699 |
| PRU | Perseus Mining Ltd | 1.475 | -5.1% | 4,595,259 | $1,917,384,306 |
| ALU | Altium Limited | 34.78 | -5.1% | 278,840 | $4,817,026,798 |
| BRG | Breville Group Ltd | 28.38 | -4.9% | 161,148 | $4,158,488,793 |
Wellness app platform Life360 (ASX:360) dropped 8% after revealing that it has made an error in its directors shareholding reporting on 25 Jan.
The company said it overstated the number of common shares held by its director, CJ Prober, by 17,410 common shares; and omitted to include that Prober held 473,573 restricted stocks.
AGL Energy (ASX:AGL) slumped 6% after reporting a sluggish first half.
AGL’s underlying profit after tax for the half fell 41% on pcp to $194 million. The company also narrowed its NPAT guidance range for the full FY22 to between $260 to $340 million.