Hot inflation spikes to 5.1%, boosting AUD, BHP rally offsets ASX plunge, down 0.8% at noon

Australian inflation came in hotter-than-expected, with trimmed mean well above the RBA’s 2 to 3 per cent target band and firming bets the central bank will begin lift-off in May rather than June. This comes as the latest consumer survey from ANZ and Roy Morgan showed a further dip in consumer confidence.

As expected, the inflation figures boosted the Aussie dollar while shares retreated after the headline figure rose to 5.1 per cent in the March quarter, compared with a year prior, beating forecasts of 4.6 per cent and following the 3.5 per cent increase in the fourth quarter.

Meanwhile, technology stocks are facing the largest hit amongst the sectors, with consumer staples as second worst, while energy is the best performer amid an oil price rebound. Woodside Petroleum (ASX:WPL) is trading 1.3 per cent higher at $31.00 and Santos (ASX:STO) is trading 1.1 per cent higher at $7.88.

Life360 (ASX:360) is leading the fall as the worst performer following its quarterly cash flow report, guiding towards a US$32 million to US$38 million loss for the calendar year. Shares are trading 20.6 per cent lower at $4.24. Afterpay owner Block (ASX:SQ2) is down 6 per cent to $139.92, while Zip Co (ASX:Z1P) is trading 5.1 per cent lower at $1.02.

Northern Star’s (ASX:NST) financial year 2022 production guidance remains unchanged at between 1.55 million ounces and 1.65 million ounces despite input costs and Covid-19 related challenges. During the March quarter, the gold miner sold 380,075 ounces of gold, with a total sales revenue of $937 million. Northern Star had a net cash position of $433 million at the end of the period, while the company warned investors of rising production costs. Shares are trading 3.4 per cent lower at $9.86.

Shanghai’s Covid-19 cases fell for a fourth day as a mass-testing blitz in Beijing continued. Fortescue Metals (ASX:FMG) is one of the bright spots, trading 1.2 per cent higher at $20.00 while BHP (ASX:BHP) is also providing support, trading 1 per cent higher at $46.13, offsetting the earlier plunge at the market open. Rio Tinto is weighing on iron ore players, down 0.2 per cent to $108.55.

Major banks are lower, led by Macquarie Group (ASX:MQG), which is down 2.2 per cent to $199.72, while Commonwealth Bank (ASX:CBA) is shedding the least, trading 1.2 per cent lower at $103.46.

Payments business EML (ASX:EML) is down 2.3 per cent to $1.63 after issuing a profit downgrade yesterday, which saw shares plunge 38 per cent. Canaccord has dropped EML Payments’ (ASX:EML) rating to a hold from a buy.

At noon, the S&P/ASX 200 is 0.8 per cent or 54.9 points lower at 7263.1.

The SPI futures are pointing to a fall of 49 points.

What else is on watch today

Production updates are on the cards for Champion Iron (ASX:CIA), with shares up 1 per cent to $6.86, Coronado Global (ASX:CRN), with shares up 0.9 per cent to $2.16, Gold Road Resources (ASX:GOR), with shares down 1 per cent to $1.54, Iluka Resources (ASX:ILU), with shares down 0.6 per cent to $10.36, and Ramelius Resources (ASX:RMS), with shares up 0.5 per cent to $1.47. Meanwhile, Downer EDI (ASX:DOW) has its investor day today, while shares are trading 4.1 per cent higher at $5.30.

There are quite a few broker upgrades, starting with Morningstar upgrading its rating for Aristocrat Leisure (ASX:ALL) to a buy from hold, shares trading 2 per cent lower at $31.71.

Iluka Resources (ASX:ILU) raised to a hold from sell, trading 0.6 per cent lower to $10.36, while Mineral Resources (ASX:MIN) was upgraded to hold from buy, with shares up 0.8 per cent to $55.13, and Washington H. Soul Pattinson (ASX:SOL), with shares trading 1 per cent higher at $26.71 amid an upgrade to a buy from hold.

Morgan Stanley has cut Beach Energy (ASX:BPT) to underweight from equal weight. Shares are trading 0.6 per cent higher at $1.60.

United Malt (ASX:UMG) received two ratings, one is a cut to hold from Morgan’s, while Credit Suisse raised it to outperform from neutral. Shares are trading 0.3 per cent higher at $4.01.

Company news

Real estate firm Dexus (ASX:DXS) is set to buy AMP’s (ASX:AMP) real estate and infrastructure business from AMP’s subsidiary Collimate Capital. Under the deal, AMP will receive an upfront cash payment of $250 million and is eligible to receive up to another $300 million subject to assets under management over a nine-month period after completion. Dexus says it expects to complete the purchase in the first half of FY23. Shares in Dexus (ASX:DXS) are trading 0.4 per cent lower at $10.75, while shares in AMP (ASX:AMP) are trading flat at $1.04.

Invictus Energy (ASX:IVZ) has received three farm-in offers for its 80 per cent owned, Cabora Bassa Project in Zimbabwe, while one of the offers is an updated bid from Cluff Energy Africa. The oil and gas company says ongoing due diligence and internal approvals are being undertaken by additional parties which may result in further bids being received. The company said it will update shareholders accordingly. Shares are trading 2.6 per cent lower at $0.19.

Best and worst performers

The best-performing sector is energy, up over 1 per cent. The worst-performing sector is information technology, down 2.5 per cent.

The best-performing stock in the S&P/ASX 200 is Whitehaven Coal (ASX:WHC), trading 5.0 per cent higher at $4.62. It is followed by shares in Downer EDI (ASX:DOW) and NIB Holdings (ASX:NHF).

The worst-performing stock in the S&P/ASX 200 is Life360 (ASX:360), trading 20.6 per cent lower at $4.24. It is followed by shares in Credit Corp Group (ASX:CCP) and PointsBet Holdings (ASX:PBH).

Commodities and the dollar

Gold is trading at US$1902.51 an ounce.
Iron ore is 2.4 per cent higher at US$138.95 a ton.
Iron ore futures are pointing to a rise of 2.85 per cent.
One Australian dollar is buying 71.59 US cents.