Evening Wrap: ASX 200 dumped after RBA rate hike, US futures steady

The S&P/ASX 200 closed 34 points lower, down -0.47%.

The local sharemarket sold off sharply after the RBA hike interest rates by 25 bps to 3.1%, which was in-line with analyst expectations.

Let's dive in.

Markets

Rate hike aside, it was a rather uneventful session. A few more observations and insights in the Brief below.

• Defensives outperformed, with Utilities, Industrials and Staples closing in positive territory

• Energy reversed a -2.2% low to close around breakeven

• Technology stocks led to the downside

• 124 of the top 200 declined (62%)

Economy

RBA raised interest rates by 25 bps to 3.1%.

• In-line with consensus expectations

• "Inflation in Australia is too high, at 6.9 per cent over the year to October. Global factors explain much of this high inflation, but strong domestic demand relative to the ability of the economy to meet that demand is also playing a role." - RBA Governor Philip Lowe

Commodities 

“A risk-off tone across saw commodities come under renewed pressure. This offset optimism on a China reopening that should benefit commodity demand,” said ANZ senior commodity analyst, Daniel Hynes. 

• Copper +0.55% to US$3.82/lb

• Iron ore futures -0.55% to US$107.95 a tonne

Latest news

Post market brief

What a choppy session. Here's the play-by-play:

• ASX 200 hits session lows of almost -0.6% in early trade

• V-shaped back up to -0.10% just before noon

• Begins to settle below breakeven leading up to the rate hike

• Gets dumped to a session low of -0.53% at 3:45 pm AEDT

• Closes a little off session lows

ASX 200 intraday chart (Source: TradingView)

There was an interesting comment from AMP's Shane Oliver who said "Today's RBA rate hike (if passed on) will mean the capacity to pay for a home for someone on avg full time earnings with a 20% deposit will be down ~27% v Apr. (Or as Finder has calculated for a $500k loan you will now need a min pre-tax income of ~$181k, up from ~$122k in Apr)."

Rate hike aside, the market is seeing a little bit of a pullback after a massive run. The question is, what kind of pullback do we get. Are investors in the mindset where they've bought the dip and now offloading into the rip?

Or will we see an easy, garden variety, sleep soundly at night kind of pullback that's well supported? Let's see how the market holds up for the rest of the week.

XJO chart (Source: TradingView)

Major announcements

Large caps (>$1bn)

• Nearmap (NEA) 0% says goodbye as its scheme of arrange becomes effective from the close of trading today 

• Magellan Financial Group (MFG) -3.3% posted a -1.56% month-on-month decline in funds under management from $51.0bn to $50.2bn 

Mid-to-small caps

• Emeco Holdings (EHL) -1.3% successfully refinanced a $100m revolving credit facility with existing lenders

• Bannerman Energy (BMN) -7.7% posted its Entago-8 Uranium Project DFS which highlights an NPV of US$209m (assumes uranium spot price of US$65/lb) 

Capital raisings

• Bellevue Gold (BGL) seeks to raise up to $70m at $1.05 per share or a 13.2% discount to its last close to accelerate the development of its Bellevue Gold Project

Broker updates 

Scans