ABC results dampen financial sector as ASX trades lower on international inflation nerves
Australian shares are trading lower on Wednesday as investors await crucial inflation data from the United States and grapple with price rises in China.
As of 2 p.m. AEST, the ASX 200 was down 0.2%.
Inflation has become one of the biggest problems facing economies around the world as nations reopen from pandemic shutdowns, grapple with supply chain issues and grapple with hungover inflation rates. low interest at the level of urgency.
US inflation data is due out later on Wednesday, AEST. This country is already showing galloping inflation.
This is also a problem here in Australia where, annually, the official rate is now 6.1%.
Rate hikes are being implemented as a result, hitting borrowers and discretionary spending.
Both Wall Street majors plunged overnight and the Nasdaq lost 1.2% as tech stocks hit on fears of a rate hike.
“Risk appetite remains cautious ahead of tonight’s US CPI data,” ANZ economists said in a statement.
Inflation data from the world’s largest economy could indicate that price increases are slowing or continuing unabated.
High inflation could trigger further rate hikes, although the US Federal Reserve has already hinted that it won’t go too strong.
The latest inflation data from China came out this morning, with official figures showing prices rose 2.7%. This is the maximum since July 2020.
The ANZ predicts that inflation in China will soon rise to between 3% and 4%, which is above the official target.
“A lot of this is due to an overlap between the hog and oil price cycles,” he said.
The price of pork has risen as the country is still rebuilding stocks after the swine fever outbreak, and demand is rising again at restaurants following post-COVID reopenings.
Oil prices are also on the rise, both for edible oils and fossil fuels, also due to many recent supply chain issues.
The Chinese Hang Seng had fallen about 2% by mid-afternoon.
The ABC drags the financial sector down
The Australian equity market was following global sentiment lower late in the afternoon.
Of the 11 major sectors, 10 were down.
Commonwealth Bank was down 0.4%, despite reporting results that showed it was increasing profits due to the effects of the housing lending boom. The results also showed that spreads were down, especially with rate hikes hitting home loan spreads.
All other major banks were up, with gains of up to 3.5% for ANZ.
Other stocks that traded lower included dairy company A2, which had lost more than 11%.
This was after he told the market that he had been pushed back by regulators in the United States to sell his formula there.
Meanwhile, GrainCorp gained 5.9% after its earnings release.
GrainCorp raised its underlying after-tax net profit forecast to $365 million to $400 million from $310 million to $370 million.
He said he was enjoying strong crop yields, which were fetching high world prices as supply shortages continued due to the war in Ukraine.
GrainCorp also said it was benefiting from high vegetable oil prices, which have soared due to a series of global supply issues.
Meanwhile, the ANZ said in a statement that the Australian dollar was a little lower after the US dollar “regained some strength amid higher US bond yields.”