Evening Wrap: ASX 200 shrugs off RBA hike as Codan rockets 24% on blowout guidance

In a nutshell

• ASX 200 closes higher after a V-shaped recovery in the last ~30 minutes of trade

• RBA hiked rates by 25 bps to 4.60%, as widely expected, the decision by the nin-member board was unanimous

• Codan soars 23.9% after guiding to at least $160m in 1H27 NPAT (up at least 125%), overtaking Wisetech by market cap, while Megaport adds 9.4% on a FY27 guidance upgrade

• Materials hold firm despite gold and copper falling 3.9% and 2.4% overnight, with BHP up 1.3% and South32 up 2.8%

Let's dive in

• A choppy, largely uneventful session saw the ASX 200 trade about 0.17% higher into the RBA decision at 2:30 pm AEST. The index fell as much as (0.22%) after the hike, bottoming at 3:35 pm, before a V-shaped recovery took it back into positive territory by the close

• The rate-sensitive Australian 3-year yield fell 9 bps to 4.96% over the same window, while the Australian dollar slipped 0.5% to 69.85 US cents

• Codan (+23.9%) was arguably the day's biggest story after guiding to 1H27 NPAT of at least $160m, up at least 125% year-on-year. Communications revenue is now guided at $400–410m (up ~83%), with EBIT margins around 40%, compared with 26% a year ago. This marks the company's fourth guidance upgrade/blowout earnings. The stock is up a cool 129% year-to-date and has overtaken Wisetech by market cap ($11.5bn vs. $11.0bn), making it the largest tech stock on the market

• Megaport (+9.4%) signed three more AI infrastructure contracts worth $978.6m in total contract value and lifted FY27 revenue guidance to $720–810m, with the midpoint 11% above ests. It also raised EBITDA margin guidance to 42–44%. Shares faded hard from an intraday gain of 20.5%, classic Megaport

• The pair helped pump some life back into tech, with Iress (+4.6%), Siteminder (+4.6%) and Wisetech (+3.1%) all higher

• Materials held up well despite a weak lead, with gold and copper down 3.9% and 2.4% respectively overnight. Heavyweights BHP (+1.3%) and Rio Tinto (+0.8%) both closed higher, while 29Metals (+4.1%) and South32 (+2.8%) showed notable resilience

• Taking a step back, the RBA decision landed on a market that was already technically weak and vulnerable. The bid that followed is perhaps unsurprising, given how much hawkishness was already priced in. Even the yield-sensitive Real Estate sector (-0.20%) clawed back most of its 1.7% intraday loss. It's not an all clear though, with yields still firmly above 5% and oil holding above US$100 a barrel

A few stocks of interest

• Stakk (+61%) automates processes such as KYC, credit checks and accounts payable. It won a contract with the FBI that it expects to "contribute meaningfully" to FY27 revenue. In recent weeks it has also said 100% of its $55.2m FY27 revenue forecast is secured through recurring contracts, and it completed its US$63m ($88.7m) acquisition of ParaScript. Some interesting numbers/deals for the now $185m market cap company

• Pinnacle (+8.0%) bounced after UBS upgraded the stock to Buy from Neutral, though it trimmed its target to $17 from $18. The broker argues that the 26% sell-off since Metrics' unaudited report more than prices in Pinnacle's exposure to the credit manager

• Karoon (-6.7%) is a good reminder to watch how stocks trade the day after a major catalyst. Shares tanked ~12% on Monday after the company cut CY26 production guidance by ~11% to 7.2–8.2 MMboe

• RBA hiked rates by 25 bps to 4.60%, as expected, marking the fourth hike this year and taking the cash rate to the highest since 2011. Key takeaways from the RBA statement:

  • AI-related demand is driving rapid growth in global technology goods prices, while domestic capacity pressure persists and firms are raising prices or looking to do so

  • June quarter growth was slightly stronger than expected, though consumer spending is easing gradually, house prices have fallen in most capitals and new housing loans have declined noticeably

  • The labour market has eased broadly as expected, while growth in business investment and debt remains strong

  • The door is left open to further hikes, with the Board saying it will do what it considers necessary, "including increasing the cash rate target further if needed"