ASX Large Caps: Aussie market gets down to some back-slapping and bubbly, as the benchmark jumps 3.59%
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It’s been a big day for Aussie markets, with the ASX 200 closing up by 3.59%, its best day since April 01, 2020 and a tremendous lift for investors almost across the board.
It was sparked by a huge 2.3% surge in early trading, and Aussie shares rallied further in the afternoon following the RBA’s surprise decision to hike rates by only 25bp.
Three of the Big Four banks had predicted a 50bp rise while CBA was the only outlier, forecasting the 25bp correctly.
AU DATA RELEASE 🚨🚨
RBA Cash Rate Decision
0.25% BASIS POINTS 🤯😱
— Azeem Sheriff (@Azeem__Sheriff) October 4, 2022
Markets moved after the announcement, with the ASX 200 gaining another 0.5% to close the day 3.2% higher.
The AUD expectedly dropped, down a percent to US64.5c, and Aussie government bond yields also plunged with the 10yr yield dropping over 22bp.
It was the sixth straight month the RBA had unleashed higher rates, which takes the cash rate now to 2.6%.
According to RateCity, the 25bp increase would increase repayments on a $750,000 mortgage by $110 a month, if the move flows through to homeowners.
Here’s an excerpt from the RBA’s official statement:
“The cash rate has been increased substantially in a short period of time.
“Reflecting this, the Board decided to increase the cash rate by 25 basis points this month as it assesses the outlook for inflation and economic growth in Australia.
“As is the case in most countries, inflation in Australia is too high.
“A further increase in inflation is expected over the months ahead, before inflation then declines back towards the 2–3% range.
“The Board expects to increase interest rates further over the period ahead. It is closely monitoring the global economy, household spending and wage and price-setting behaviour.”
Back to the ASX, all 11 sectors closed higher today with Mining and Tech leading the way.
InfoTech nearly cracked the major 5.0% milestone, finishing oh-so-close at +4.94% for the day, with Materials (+4.50%) and Energy (+4.47%) neck and neck for Second-Best in Show.
But while that may have put a smile on the face of investors, it put a frown on the face of government bond yields, which plummeted as the RBA decision and market movements sank in.
At 3pm the yield on 1-year Australian government bonds had fallen 11.4%, to 2.83%. Even worse, on 10-year govt debt the yield has also crashed, down 6.2% to 3.67%.
Swipe or scroll to reveal the full table. Click headings to sort.
Topping the leaderboard among the Large Caps today was Lake Resources (ASX:LKE), up 14% because all the cool kids were stacking on value today – plus LKE had its annual general meeting today, so having everyone in the same room probably put out some super-positive vibes as well.
But the talk of the town today is undoubtedly Pilbara Minerals (ASX:PLS), which broke through a huge psychological price barrier today, climbing through $5.00 to finish at $5.11 – a 12.3% jump that has made a lot of people a lot of money.
Josh Chiat – arguably the finest journalist living in a tin shack in the middle of nowhere, Western Australia – has all the gossip here in Monsters of Rock… but we’ll spare you doing some mathematics of your own with this observation from Josh this arvo:
“if you’d invested 10,000 bucks in PLS in May 2014 it’d be worth over $5 million today,” Josh says.
“I wish I’d invested $10k in PLS in May 2014,” the rest of us says, except for the people who did invest $10k in PLS in May 2014, who our sources tell us are laughing their arses off at the rest of us.
And finally, always worth a mention because of how erotically erratic its trading price is, Sayona Mining (ASX:SYA) climbed 14% by the end of the day, after several elderly Greek fortune tellers had the same dream about a blue-eyed ginger cat being eaten by a fish.
That may sound silly, but it’s about as accurate as any real explanation for how and why Sayona’s price lurches around.