Market Wraps

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

Tue 06 Dec 22, 5:16pm (AEST)

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.


Today in Review

Tue 06 Dec 22, 4:19pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,291.3 -0.47%
All Ords 7,487.7 -0.53%
Small Ords 2,900.5 -1.20%
All Tech 2,140.8 -1.66%
Emerging Companies 2,168.2 -1.26%
Currency
AUD/USD 0.6728 +0.46%
US Futures
S&P 500 $4,007.5 +0.11%
Dow Jones $34,027.0 +0.12%
Nasdaq $11,811.5 +0.05%
Name Value % Chg
Sector
Utilities 8,510.7 +0.53%
Industrials 6,521.3 +0.33%
Consumer Staples 12,869.1 +0.23%
Energy 11,314.8 +0.15%
Communication Services 1,471.5 -0.10%
Health Care 43,263.4 -0.12%
Financials 6,519.0 -0.55%
Consumer Discretionary 2,923.4 -0.57%
Materials 18,187.1 -0.76%
Real Estate 3,106.1 -1.04%
Information Technology 1,471.9 -2.04%

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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

XJO chart
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
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 

Ticker

Company

Broker

Rating

Target price

CTD

Corporate Travel Management

Macquarie

Outperform

$19.95 from $21.50

FLT

Flight Centre Travel

Macquarie

Neutral

$17.35 from $17.75

PNV

Polynovo

Macquarie

Outperform

$2.30 from $1.90

TWE

Treasury Wines

Credit Suisse

Neutral from Outperform

$13.80

WDS

Woodside Energy

Morgan Stanley

Overweight

$41.00 from $42.30


Scans

Top Gainers

Code Company Last % Chg
4DS 4DS Memory Ltd $0.051 +37.84%
KTG K-Tig Ltd $0.115 +35.29%
CSE Copper Strike Ltd $0.12 +26.32%
AQS AQUIS Entertainme... $0.16 +23.08%
WFL Wellfully Ltd $0.017 +21.43%
View all top gainers

Top Fallers

Code Company Last % Chg
DTR Dateline Resource... $0.041 -34.92%
KPO Kalina Power Ltd $0.018 -21.74%
BMO Bastion Minerals Ltd $0.052 -17.46%
TRE Toubani Resources... $0.20 -16.67%
EQS Equity Story Grou... $0.046 -16.36%
View all top fallers

52 Week Highs

Code Company Last % Chg
VSR Voltaic Strategic... $0.033 +16.07%
WR1 Winsome Resources... $1.41 +14.63%
DW8DD DW8 Ltd $0.033 +10.00%
POL Polymetals Resour... $0.245 +8.89%
A4N Alpha Hpa Ltd $0.755 +4.14%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
DTR Dateline Resource... $0.041 -34.92%
BMO Bastion Minerals Ltd $0.052 -17.46%
TRE Toubani Resources... $0.20 -16.67%
MEG Megado Minerals Ltd $0.04 -13.04%
LAW Lawfinance Ltd $0.075 -11.77%
View all 52 week lows

Near Highs

Code Company Last % Chg
SMLL Betashares Aust S... $3.56 -0.28%
OZBD Betashares Austra... $44.66 -0.16%
PCI Perpetual Credit ... $0.965 -1.03%
WVOL Ishares Edge MSCI... $35.81 +0.42%
NUF Nufarm Ltd $6.14 +1.49%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
CCX City Chic Collect... $0.74 +4.23%
KGL KGL Resources Ltd $0.23 +4.55%
DUN Dundas Minerals Ltd $0.19 0.00%
SHV Select Harvests Ltd $4.30 -2.27%
WKT Walkabout Resourc... $0.11 +4.76%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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