Surging commodity prices and higher yields saw the cyclical Materials, Energy and Financial sectors return to vogue as the local bourse secured its first close above the 200 day moving average at 7333 since mid-January.
Living up to its reputation as the Big Australian, BHP Group (BHP) added almost 40 points alone to the value of the index today, as its share price lifted by 5.1% to $48.82. Fellow mining heavyweight Rio Tinto (Rio) climbed by 3% to $113.74, Fortescue Metal Group added 1.23% to $18.94. At the same time, Mineral Resources (MIN) added 4.85% to $49.09.
Reports the EU is considering joining the U.S in a Russian oil embargo propelled the price of crude oil back above $112.00/ bbl and reignited energy market jitters.
Beach Energy (BPT) added 3.17% to $1.63. Woodside Petroleum (WPL) added another 1.61% to $32.16, while Santos (STO) added 2.23% to $7.79. Coal miner, New Hope Coal (NHC) added 8.53% to $3.18.
Federal Reserve Chairman Jerome Powell is becoming increasingly hawkish, and last night he opened the door to a 50bp rate hike at the next FOMC meeting.
If there is one thing, the Australian Financial Sector like it is higher yields as it allows the big banks to increase profitability via higher Net Interest Margins.
Macquarie (MCQ) added 1.32% to $197.58, one good session away from trading again on a $200 handle. National Australia Bank (NAB) added 1.07% to $31.23, ANZ added 0.33% to $27.67, Westpac (WBC) added 0.30% to $23.62, and Commonwealth Bank (CBA) lifted by 0.35% to $106.07.
The sensitivity of technology stocks to higher interest rates was apparent today as the air came out of the local IT sector, following its almost 20% rally from February lows.
Afterpay owner Block (SQ2) dropped by 5% to $175.00, Zip Co (Z1P) fell by 4% to $1.52, Appen fell by 3.12% to $6.83, and Xero (XRO) fell 2.63% to $98.82.
Despite the bullion price continuing to mark time around the $1935 level, local gold stocks have outperformed today, perhaps pre-empting strength in the gold price tonight. Northern Star Resources (NST) added 1.92% to $10.60, Evolution Mining (EVN) added 0.91% to $4.45, and Newcrest Mining (NCM) added 2.81% to $25.98.
It's gone from bad to worse for Magellan's (MFG) shareholders today following the exit of Hamish Douglas from the board. Its shares closed another 3.78% lower at $14.49, eyeing last week's low at $13.22.
The AUDUSD is trading modestly lower at .7394, struggling to make headway above .7400c following a sharp drop in the ANZ consumer confidence index. And as RBA continues to remain patient.
Source Tradingview. The figures stated are as of March 22nd, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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