- Markets @ Midday: Listen here at lunchtime or find all Market Matters Podcasts on Spotify.
The ASX edged higher today, extending yesterday’s move, following the Federal Reserve’s move to push the cash rate higher overnight. The Fed delivered the 25bp hike as expected, though commentary pointed to further tightening as Chair Kevin Warsh reiterated a firm stance on inflation. That initially pushed global markets lower, although bond yields subsequently eased and provided some relief for equities.
Financials were among the strongest parts of the market with continued rotation out of the Materials stocks and back to the Big Four and the broader sector. Healthcare and Real Estate names were also strong, while Energy lagged as brent prices came off the boil slightly.
- ASX 200: +35.86pts (+0.41%) to 8,732.40
- AUD/USD: 0.7113, flat
- Best sectors: Financials +1.42%, Healthcare +0.98%, REITs +0.66%
- Worst sectors: Energy -1.10%, IT -0.98%, Materials -0.38%
- Financials were among the strongest parts of the market with continued rotation out of Materials – the ‘certainty trade’. NAB (ASX: NAB) +3.16% to $39.22, ANZ (ASX: ANZ) +2.08% to $37.78, CBA (ASX: CBA) +1.63% to $154.01 and Westpac (ASX: WBC) +1.16% to $34.83 all firmed. ANZ held in the Active Growth and Income Portfolios. WBC held in the Active Income Portfolio.
- Materials remained a lowlight, giving back part of Tuesday’s 1.2% rebound. The sector is around 10.5% below its 26 August record high, although it remains about 2.2% above its 200-day moving average.
- Gold and lithium names were particularly weak, with Pantoro Gold (ASX: PNR) -7.45% to $2.61, Elevate Uranium (ASX: ELV) -4.13% to $6.27, South32 (ASX: S32) -3.39% to $4.84, IGO (ASX: IGO) -1.71% to $6.91 and Ramelius Resources (ASX: RMS) -4.14% to $3.47 all among the heavier casualties. South32 held in the Active Growth Portfolio.
- The energy sector reversed some of its recent strength as Brent fell 2.6% overnight to ~US$105 /bbl though remains a major macro trade with the ongoing Middle East supply disruption providing a floor underneath prices.
- Woodside (ASX: WDS) -0.87% to $32.98, Santos (ASX: STO) -1.83% to $8.57, Karoon (ASX: KAR) -2.64% to $1.845, Beach Energy (ASX: BPT) -3.33% to $0.87 and Viva Energy (ASX: VEA) -1.27% to $3.11 were all softer as the sector gave back some of its recent outperformance.
- Light & Wonder (ASX: LNW) -8.17% to $113.57 was hit after announcing Josh Wilson will step down from his position as CEO of SciPlay, LNW’s social casino business, after two decades with the business. Light & Wonder held in the Active Growth & Emerging Companies Portfolio.
- ASX Ltd (ASX: ASX) +4.14% to $55.31 jumped after UBS upgraded the exchange operator, citing trading activity running ahead of consensus in the first quarter of FY27.
- Austal (ASX: ASB) +5.76% to $4.59, Electro Optic Systems (ASX: EOS) +7.99% to $10.00 and DroneShield (ASX: DRO) +6.77% to $1.74 were among the stronger names as defence stocks jumped.
- Echo IQ (ASX: EIQ) +14.56% to 59c rebounded after outlining potential pathways back to FDA clearance following its earlier “Not Substantially Equivalent” determination which saw shares come off over 50% last week. The company says FDA concerns relate to clinical validation statistics rather than the underlying technology.
- Transurban (ASX: TCL) -0.22% to $13.40 fell after reporting August traffic growth of 3.4%, with North American traffic particularly strong. More than 90% of revenue is CPI-linked or subject to fixed escalators, providing some inflation protection.
- Macquarie Group (ASX: MQG) -0.08% to $239.64 faces a class action from investors exposed to the collapsed Shield Master Fund. Macquarie has previously agreed with ASIC to refund the $321m capital loss, while the class action alleges investors have not been compensated for lost investment opportunity.
- Gold: $US4,306.66 / +1.01%
- Brent crude: $US104.72 / -1.05%
- Iron Ore: $US96.10 / +0.31%
- S&P 500 E-mini futures: +39.75pts / +0.52%
- Dow E-mini futures: +318.00pts / +0.61%
- FTSE futures: +20.00pts / +0.19%
