ASX 200 afternoon report: 7 May 2024
Find out below who have been the shakers and movers in today’s session on the ASX 200.
The ASX 200 trades 96 points (1.25%) higher at 7777 at 3.00pm AEST.
The ASX 200 has ripped higher this afternoon after the Reserve Bank of Australia (RBA) kept its official cash rate on hold at 4.35% at its eagerly anticipated board meeting today. In the accompanying statement, the RBA noted that higher interest rates were working to establish a more sustainable balance between demand and supply.
While there are encouraging signs that inflation is moderating: “Services inflation remains elevated and is moderating at a more gradual pace." A factor "consistent with continuing excess demand in the economy and strong domestic cost pressures, both for labour and non-labour inputs."
Reflecting the uncertain backdrop, the RBA's forward guidance was identical to that offered in the March meeting. "The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain, and the Board is not ruling anything in or out," it said.
Key economic indicators to map out RBA's next move
Given the RBA’s heightened sensitivity to the incoming data the market will seek further insights into the RBA’s next move from the following key data ahead of the next RBA Board meeting on June 18th.
- Federal Budget Tuesday, 14 May
- Labour force report Thursday, 16 May
- RBA meeting minutes Tuesday, 21 May
- Retail Sales Tuesday, 28 May
- Monthly CPI indicator Wednesday, 29 May
- Q2 GDP Wednesday, 5 June
- Labour Force report Thursday, 13 June
While we view the bar to another RBA rate hike as high, we acknowledge the window for rate cuts in 2024 has narrowed and last month pushed back our call for a first RBA rate cut from August until November. Ahead of the announcement, there was a ~40% chance of a 25bp rate hike priced into the interest rate market for August, which has fallen to about 25%.
ASX 200 stocks
Mining stocks
- Fortescue: +1.54% to $27.73
- BHP: + 1.45% to $43.38
- Rio Tinto: + 1.47% to $131.59
- Mineral Resources: +0.52% to $7.40
Banking sector
- Macquarie: +2.12% to $190.48
- Westpac: +2.06% to $27.67
- CBA: + 1.45% to $118.25
- ANZ: + 0.14% to $28.81
Consumer-facing stocks
- Kogan: + 5.52% to $4.96
- Nick Scali: + 2% to $15.32
- Adairs: + 2.38% to $2.15
- JB Hi-Fi: + 1.47% to $60.79
ASX 200 technical analysis
As we have noted in recent reports, a 3-5% pullback is very common for the ASX 200 in early May. The big question is, was it pulled forward into April, or does the traditional May pullback still lie ahead? We prefer the latter due to the mixed signs of bottoming at the recent 7492 low. As such, we view the current bounce as a B wave, which should stall around 7800ish before the ASX 200 commences another leg lower (Wave C of an ABC correction) towards the 200-day moving average at 7365ish.
ASX 200 daily chart
- Source TradingView. The figures stated are as of 7 May 2024. 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.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.