A growing appetite for risk has seen tech stocks extend its rally, leading the Australian sharemarket to another strong day ahead of the Reserve Bank interest rate outcome.
Investors took the baton from Wall St after watching shares in Twitter surge 27 per cent after Elon Musk bought a 9.2 per cent stake in the company worth US$3 billion. Lifting global sentiment, tech shares outperformed with shares in US Block advancing 8.7 per cent, a move that has seen local Block (ASX:SQ2) jump 6.6 per cent to $192.09 today.
The tech sector alone is up 3.5 per cent, thanks to the jumping Block (ASX:SQ2) with Altium (ASX:ALU) and Xero (ASX:XRO) adding 4 per cent each to the sector.
Money is moving back into the local bourse with investors piling into energy and utility stocks, up 2.5 per cent and 1.7 per cent respectively in an almost broad based rally. Materials is bucking the trend, down 0.3 per cent amid the absence of any meaningful lead given that market participants in China are on leave due to the Tomb Sweeping Festival holiday.
Supporting energy stocks are oil prices on the rise as global outcry is growing louder over Russia’s actions in Ukraine as the US and the European Union prepare to slap new sanctions on Russia.
Lithium miners saw another strong session with Mineral Resources (ASX:MIN) jumped 1.7 per cent to $56.42, Pilbara Minerals (ASX:PLS) has gave back 0.3 per cent after its 5.5 per cent surge yesterday to $3.61 while IGO (ASX:IGO) lost 2.8 per cent to $14.58 on news that the board of directors plan to terminate a $1.1 billion acquisition deal by the nickel and lithium miner.
Meanwhile, Microba Life Sciences (ASX:MAP) listed on the ASX today. Their shares issued at $0.45, started trading at 44 cents and now trading at 38 cents.
At noon, the S&P/ASX 200 is 0.71 per cent or 53.20 points higher at 7566.90.
The SPI futures are pointing to a rise of 43 points.
What to expect from the RBA today
The Melbourne Institute’s inflation gauge yesterday showed prices rose 0.8 per cent in March to 4 per cent over the year yesterday, while unemployment is down 4 per cent to a 13 year low on a tight labour market amid a Federal Budget that is set to be stimulative as consumers and businesses are set to enjoy the offsets that could help their back pocket, to offset higher energy prices. However, wages growth is the missing piece which is less than the 3 per cent target.
Investors are going to keep an eye out on the colour in the policy statement as they look for the inflation outlook, as well as the outlook for financial stability and what kind of impact the budget will have.
Local economic news
Consumer confidence rebounded 2.5 per cent as falling inflation expectations boosted sentiment. The index rose by 2.3 points to 93.4 this week after average petrol prices dropped by over 30 cents per litre last week as per ANZ and Roy Morgan. Consumer confidence has fallen for three straight weeks before this week’s increase.
The Australian Industry Group and HIA Australian performance of construction index improved by 3.1 points to 56.5 points, indicating further recovery in activity across the construction sector after a sharp fall over the summer holiday period. Results above 50 points indicate expansion in the sector, with higher results indicating a stronger expansion.
Best and worst performers
The best-performing sector is Information Technology, up 3.64 per cent. The worst-performing sector is Materials, down 0.30 per cent.
The best-performing stock in the S&P/ASX 200 is Block (ASX:SQ2), trading 6.72 per cent higher at $192.35. It is followed by shares in Altium (ASX:ALU) and Xero (ASX:XRO).
The worst-performing stock in the S&P/ASX 200 is Lynas Rare Earths (ASX:LYC), trading 4.70 per cent lower at $10.86. It is followed by shares in AVZ Minerals (ASX:AVZ) and Magellan Financial Group (ASX:MFG).
Commodities and the dollar
Gold is trading at US$1929.83 an ounce.
Iron ore is 0.6 per cent higher at US$160.80 a ton.
Iron ore futures are pointing to a rise of 3.46 per cent.
One Australian dollar is buying 75.38 US cents.