Evening Wrap: ASX 200 rises following 'no-surprise' RBA rate increase of 0.25%

The S&P/ASX 200 closed 113.4 points higher, up 1.7%.

The local share market managed to stage a late afternoon rally in the wake of the Reserve Bank's 0.25% rate hike to 2.85%.

While today's rate increase was in line with the market's expectations, what surprised the market were revelations that inflation would hit 8% later this year.

All four banks, along with iron ore majors closed the session higher.

Let's dive in.

Markets

The ASX 200 closed 1.7% higher on lower-than-normal volume, following today's Melbourne Cup rate hike of 25 basis points to 2.85%.

Gains were broad and all 11 sectors were higher at the close.

• Material, utilities, real estate and energy sectors were all up over 2% at the close.

• Telcos, healthcare, and staples underperformed on revelations underlying inflation could hit 8% later this year

• 89% of the top 200 advanced

• Overall, 796 stocks rose, 506 fell & 405 finished unchanged

Economy

The key highlight today was the Reserve Bank’s interest rate decision.

As expected by around 90% of those surveyed by Reuters, the RBA increased the official cash rate by 25 basis points to 2.85% – a 9 and a half year high. The US earnings season continues tonight with Pfizer, Airbnb and Advanced Micro Devices included amongst those companies expected to release earnings updates.

Commodities

Iron ore prices fell to their lowest level since early 2020 following dismal expectations for Chinese steel demand, and a pickup in the supply of the raw material.

• Crude oil was up 0.88% to US$87.29 as weaker dollar offset China covid concerns

• Iron ore futures fell by -0.6% to $US92.43 per tonne

• The coal price fell -7.62% to 356.30/tonne

• Copper and silver prices were both up between 2%-3%

Latest News

Post market Brief

There was a dearth of major company announcements released today.

While the RBA's cash rate rise did little to derail the market today, investors will be left to makes sense of new revelations by the central bank today that inflation will hit 8% by the end of the year.

While neither company posted announcements today, healthcare stock Imugene (ASX: IMU) and Nickel Mines (ASX: NIC) were amongst today’s best performers, up 11.4% and 7.5%, respectively.

Core Lithium (CXO) appears to have received a tail wind from yesterday's quarterly update with the share price up around 4% at the close. Meantime, Brambles (ASX: BXB) and Chorus Ltd (ASX: CNU) were down -1% and -3.6% respectively to be the amongst the worst performing stocks in the ASX 200 today. After trading ex-dividend, Brickworks (ASX: BKW) was down -2.3% at the close and is expected to pay its 41-cents-per-share dividend to eligible shareholders on November 23.

Major announcements

Large caps (>1bn)

Bank of Queensland (ASX: BOQ) +0.95% after issuing a replacement prospectus for its Capital Notes 3

Genworth Mortgage Insurance Australia (ASX: GEN) +5.17% after guiding to FY22 NEP to be towards the top of the guidance range of $375 million to $435m provided at 1H22.

ReadyTech (ASX: RDY) +28.09% on news that Pacific Equity Partners has made a conditional bid to acquire ReadyTech for $4.50 a share.

Lithium miners Pilbara Minerals (PLS) +4.32% after the release of corporate presentation today and update yesterday which revealed a strong September Quarter Performance.

Mid-to-small caps

Betmakers Technology Group (ASX: BET) + 1.82% after announcing that it has completed the acquisition of ABettorEdge Pty Ltd trading as “Punting Form”.

Rex Minerals (ASX: RXM) +20.69% seemingly on no update. The company issued a statement advising it was not aware of any additional information that could be the reason for the recent trading in its securities.

Broker updates

Scans