Evening Wrap: ASX 200 shrugs off rate rise, falling commodity prices

The fallout from yesterday's rate hike, along with news today at least one of the Big 4 has passed it on to customers, and weaker metals and energy prices, couldn't derail a modest rally in the S&P/ASX 200. Tech, a resurgent Property sector, and Telco's did the heavy lifting, while shares mining companies slumped.

Let's dive in...

ASX 200 Session Chart

What rate hike? ASX 200 closes near best levels (Source: Market Index)

Markets

Diversification is the name of the game. You can pretty much guarantee that on any day, the S&P/ASX 200 is going to be internally divided between winners and losers. The big fund managers invest or divest based upon themes, and hot money moves in and out of sectors.

Since the October low, the hot money has been moving back into Property stocks. This is because global long term rates have fallen sharply and this sector's performance is positively correlated to lower rates.

Charter Hall Group (ASX: CHC) +2.4%, Dexus (ASX: DXS) +2.2%, Stockland (ASX: SGP) +1.8%, and Goodman Group (ASX: GMG) +1.8% were the best in the property sector today.

Tech has also had a fantastic run since the October low, the S&P/ASX Information Technology Sector (XIJ) has risen for six straight trading sessions. This sector is another key beneficiary of lower long term interest rates.

Brainchip Holdings (ASX: BRN) +38.9%, Weebit Nano (ASX: WBT) +6.8%, EML Payments (ASX: EML) +4.4%, and Megaport (ASX: MP1) +3.7% all did well in the tech sector today.

To find the money to buy property and tech stocks, the hot money's gotta come from somewhere. Today it was the S&P/ASX Materials sector (XMJ) which picked up the tab. This was a result of lower base metals prices which fell in response to weaker than expected Chinese trade data out yesterday.

Develop Global (ASX: DVP) -5%, South32 (ASX: S32) -4.3%, Vulcan Energy Resources (ASX: VUL) -4.2%, Adriatic Metals (ASX: ADT) -4%, and Champion Iron (ASX: CIA) -2.9% were notable decliners in the materials sector today.

Economy

No major economic data today apart from NAB passing on the full RBA rate hike to its customers.

Watch out for Federal Reserve Chairman Jerome Powell's speech at a finance industry conference at am 01:15 AEDT.

Latest news

James Hardie surges on healthy margins, buyback

The building products company closed up 13.8% at $46.97 after reporting record Q2 results. James Hardie reported adjusted EPS of $0.41, in line with consensus estimates, but on consensus beating sales of $999 million (vs $974 million).

Investors had grown concerned spiralling mortgage rates in the US and tighter financial conditions in Australia's housing market could derail Hardie's profits. On the contrary, the company noted it had achieved a 15% increase on the prices of building materials sold in Australia and had also racked up record margins in its North American operations.

Also pleasing the market was the surprise US$250 million share buyback to be completed over the next 12-months.

Interesting news and movers

Trading higher

• +38.9% Brainchip Holdings (BRN) - no news

• +22.7% Imugene (IMU) - continuation rally post 6 Nov update "positive signals" from the co's Phase 1 VAXINIA Study

• +20.0% Next Science (NXS) - continuation rally post 3 Nov update, positive study results for the co's XPERIENCE product

• +13.8% James Hardie Industries (JHX) - reported Q2 results; launches US$200 million buyback

Trading lower

• -6.0% NZME (NZM) - updated guidance

• -5.9% Silver Mines (SVL) - lower overnight precious metals prices

• -3.3% Domain Holdings Australia (DHG) - response to Q1 update

Broker notes

• Altium (ALU) upgraded to buy from outperform CLSA; Price Target: $46 (from $45)

• Chrysos Corp (C79) upgraded to Overweight from neutral at Barrenjoey; Price Target: $8.20

• Integral Diagnostics (IDX) upgraded to buy from accumulate at Ord Minnett; Price Target: $2.50 (from $3.50)

• PEXA Group (PXA) upgraded to neutral from underweight at Jarden; Price Target: $11.95 from $10.40

• Technology One (TNE) initiated at Neutral at JPMorgan; Price Target: $15.30

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