Lending Association

Materials performed strongly: ASX closes 0.4% higher

On Tuesday, the ASX experienced gains following the Reserve Bank’s decision to keep the cash rate steady at 4.35 per cent, in line with expectations.

The benchmark S&P/ASX 200 Index showed a 0.4 per cent increase, or 27.4 points, reaching 7703.2, after fluctuating between gains and losses prior to the announcement. The materials and energy sectors notably performed well. Simultaneously, the Australian dollar saw a slight decline of 0.3 per cent to US65.4¢ post the RBA’s decision to maintain the cash rate at a 12-year high. The central bank, in its statement, indicated a reliance on data and an ongoing assessment of risks without ruling out any options.

Matt Sherwood, Perpetual’s head of investment strategy, commented on the market’s reaction, noting a bounce in equity markets and a subdued response in bond markets. He highlighted the removal of the tightening bias but expressed scepticism about the possibility of rate cuts this year, especially considering the recent national accounts showing wages growth still above its long-term average.

In contrast, the Bank of Japan implemented a historic shift by tightening monetary policy for the first time in over a decade, moving from -0.1 per cent to 0.0 per cent to 0.1 per cent.

On the ASX, energy stocks performed strongly, buoyed by a rally in oil prices to a four-month high. Notable performers included Woodside Energy, rising 2.3 per cent to $30.25, Santos, up 1.8 per cent to $7.49, and Beach Energy, climbing 1.7 per cent to $1.75.

At the closing bell, the S&P/ASX 200 was 0.36 per cent higher at 7,703.20.

Futures

The Dow Jones futures are pointing to a fall of 6 points.
The S&P 500 futures are pointing to a fall of 4.75 points.
The Nasdaq futures are pointing to a fall of 43 points.
The SPI futures are up 25 points.

Best and worst performers

The best-performing sector was Materials, up 2.11 per cent. The worst-performing sector was Consumer Staples, down 0.84 per cent.

The best-performing large cap was Fortescue (ASX:FMG), closing 3.59 per cent higher at $24.54. It was followed by shares in Meridian Energy (ASX:MEZ) and Newmont Corporation (ASX:NEM).

The worst-performing large cap was EBOS Group (ASX:EBO), closing 0.77 per cent lower at $34.77. It was followed by shares in Pro Medicus (ASX:PME) and Sonic Healthcare (ASX:SHL).

Asian markets

Japan’s Nikkei has gained 0.37 per cent.
Hong Kong’s Hang Seng has lost 1.15 per cent.
China’s Shanghai Composite has gained 0.82 per cent.

Commodities and the dollar

Gold is trading at US$2,162.40 an ounce.
Iron ore is 5 per cent higher at US$105.25 a tonne.
Iron ore futures are pointing to a 4.52 per cent rise.
Light crude is trading $0.16 lower at US$82.56 a barrel.
One Australian dollar is buying 65.25 US cents.