The jitters caused by the collapse of Silicon Valley Bank caused a stir in the local market today, even after it was announced that depositors with the troubled bank would have access to their funds in full from Monday thanks to the US Treasury, the Fed and the Federal Deposit Insurance Corp (FDIC) that is currently managing the bank’s assets.
Local equities opened slightly lower with likes of BHP Group (BHP), RIO Tinto (RIO), Mineral Resources (MIN), South32 (S32), CSL Ltd (CSL), and ASX Ltd (ASX) all trading ex-dividend initially weighing on the index. However concerted steady broad-based buying across the market saw over 70% of the index finish up on the day led by some standout performances across the coal and tech names ably supported by a strong day for the banks where we saw NAB, WB,C, and ANZ all pass on the RBA’s rate hike to mortgage holders, this should make Philip Lowe happy! However his recent dovish appears to have ignited some buying into the local market which is continuing to outperform its peers.
Equities markets took a hit over the last 12 or so hours following Jerome Powell’s comments overnight as the Head of the Fed turned more hawkish. Traders priced in a larger chance of a 50bp hike at the next meeting following the comments in direct contradiction to his Aussie counterpart Philip Lowe who took a more dovish tone at the RBA’s rate call yesterday. As a result, the USD rallied strongly causing pressure across commodities which was the main drag on the index today.
Bond yields fell, the rate-sensitive 3 years lost 12bps, the Aussie dollar declined and stocks rallied, with the relative sector performances acknowledging what looks to be a very subtle but clear change of tack by our Central Bank.
A choppy session that saw the best of it early thanks to a bullish session overseas where stocks continue to climb the wall of worry. Interest rate-sensitive sectors were the driver today with Aussie 3-year yields off 9bps underpinning buying in retail, IT and Property sectors ahead of key central-bank updates headlined by the RBA tomorrow (+25bps expected) & Fed Chair Jerome Powell’s semi-annual testimony to the US Senate on Wednesday.
A broad-based rally helped recover some of the losses seen on the index earlier in the week. The banks found some buying to round out the week after a few softer sessions, while the resource heavyweights continued their march higher. Real Estate was the only area of the market still struggling today with the market still concerned about interest rates and their impact on property valuations. Despite the bounce today, the index closed -23pts/-0.32% lower for the week.
While the index was largely unchanged, there were some big swings from a sector point of view. Both Materials & Energy was strong, but that’s where the good news ended. The remaining nine sectors closed lower, albeit dividends weighing on some areas more than others as a total of 9 shares in the index traded ex-dividend today.
It was a soggy start to the session today, but buyers came to life mid-morning when some local data prints landed. Inflation (CPI) for January came in below expectations at 7.4%, below the 8% expected by the market while GDP Growth for the 4th quarter was 0.5% vs 0.7% expected. The data took some heat out of bond yields and helped support shares today, while China’s Caixin PMI was also above expectations which supported resource names into the afternoon.
The market ended a tough month on the front foot with the material sector seeing some rare buying, while Energy & Property also chimed in. Over the course of the 28 days of February, resources were the biggest drag on the index which fell by ~3% overall, clearly a weak period for stocks but against the backdrop of January’s ~6% advance, it’s no disaster, particularly given bond yield find themselves back testing multi-year highs.
Local equities opened slightly lower with likes of BHP Group (BHP), RIO Tinto (RIO), Mineral Resources (MIN), South32 (S32), CSL Ltd (CSL), and ASX Ltd (ASX) all trading ex-dividend initially weighing on the index. However concerted steady broad-based buying across the market saw over 70% of the index finish up on the day led by some standout performances across the coal and tech names ably supported by a strong day for the banks where we saw NAB, WB,C, and ANZ all pass on the RBA’s rate hike to mortgage holders, this should make Philip Lowe happy! However his recent dovish appears to have ignited some buying into the local market which is continuing to outperform its peers.
Equities markets took a hit over the last 12 or so hours following Jerome Powell’s comments overnight as the Head of the Fed turned more hawkish. Traders priced in a larger chance of a 50bp hike at the next meeting following the comments in direct contradiction to his Aussie counterpart Philip Lowe who took a more dovish tone at the RBA’s rate call yesterday. As a result, the USD rallied strongly causing pressure across commodities which was the main drag on the index today.
Bond yields fell, the rate-sensitive 3 years lost 12bps, the Aussie dollar declined and stocks rallied, with the relative sector performances acknowledging what looks to be a very subtle but clear change of tack by our Central Bank.
A choppy session that saw the best of it early thanks to a bullish session overseas where stocks continue to climb the wall of worry. Interest rate-sensitive sectors were the driver today with Aussie 3-year yields off 9bps underpinning buying in retail, IT and Property sectors ahead of key central-bank updates headlined by the RBA tomorrow (+25bps expected) & Fed Chair Jerome Powell’s semi-annual testimony to the US Senate on Wednesday.
A broad-based rally helped recover some of the losses seen on the index earlier in the week. The banks found some buying to round out the week after a few softer sessions, while the resource heavyweights continued their march higher. Real Estate was the only area of the market still struggling today with the market still concerned about interest rates and their impact on property valuations. Despite the bounce today, the index closed -23pts/-0.32% lower for the week.
While the index was largely unchanged, there were some big swings from a sector point of view. Both Materials & Energy was strong, but that’s where the good news ended. The remaining nine sectors closed lower, albeit dividends weighing on some areas more than others as a total of 9 shares in the index traded ex-dividend today.
It was a soggy start to the session today, but buyers came to life mid-morning when some local data prints landed. Inflation (CPI) for January came in below expectations at 7.4%, below the 8% expected by the market while GDP Growth for the 4th quarter was 0.5% vs 0.7% expected. The data took some heat out of bond yields and helped support shares today, while China’s Caixin PMI was also above expectations which supported resource names into the afternoon.
The market ended a tough month on the front foot with the material sector seeing some rare buying, while Energy & Property also chimed in. Over the course of the 28 days of February, resources were the biggest drag on the index which fell by ~3% overall, clearly a weak period for stocks but against the backdrop of January’s ~6% advance, it’s no disaster, particularly given bond yield find themselves back testing multi-year highs.
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