• Thu. May 30th, 2024

ASX 200 fluctuates around 7,750, pares likelihood of RBA rate cuts in 2024

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  • ASX 200 trades in a range after positive employment data on Thursday. 
  • Australia’s private sector activity marked its second consecutive month of expansion in March.
  • The S&P 500 reached 5,200 after the Fed maintained rates at 5.5%.

The ASX 200 Index moves back and forth in a range, trading near 7,750 on Thursday. This reversal could be attributed to the positive Employment data from Australia. The seasonally adjusted Employment Change for February surged to 116.5K, surpassing expectations of 40.0K and the previous figure of 15.3K. Additionally, the Unemployment Rate increased by 3.7%, lower than the anticipated 4.0% and the previous 4.1%. These positive figures contribute to the Reserve Bank of Australia’s (RBA) hawkish stance. The RBA has chosen to maintain interest rates at a 12-year high of 4.35% on Tuesday, consistent with its stance for the third consecutive meeting.

ASX 200 Index surged by nearly 1.0% to surpass 7,770 in the early hours, tracking a rally on Wall Street overnight. This surge followed the US Federal Reserve’s (Fed) reaffirmation of expectations for three interest rate cuts this year. The S&P 500 reached 5,200 after the Fed maintained rates at 5.5%. Base metals, including copper and palladium, also participated in the rally overnight.

The Australian equity market mirrored a retreat in financial stocks, with notable declines observed across major players. Commonwealth Bank slid to 116.60, marking a decrease of 0.42%, while National Australia Bank dropped to 34.50, down by 0.54%, and Westpac Banking slipped to 26.40, down by 0.75%. Conversely, Telix Pharmaceuticals, Ramelius Resources, and Webjet emerged as top gainers, whereas Brickworks and Strike Energy were among the top losers.

Australia’s private sector activity showed resilience in March, marking its second consecutive month of expansion. The preliminary Judo Bank Services PMI climbed to 53.5 from the previous 53.1, while the Composite PMI increased to 52.4 from 52.1. However, Manufacturing PMI experienced a decline, dropping to 46.8 from the previous 47.8.

The US Justice Department is preparing to file a lawsuit against Apple, potentially as early as Thursday. The suit alleges that the tech giant violated antitrust laws by impeding rivals’ access to the iPhone’s hardware and software features. This legal action is part of the Biden administration’s broader efforts to address antitrust concerns within the tech industry, further escalating its confrontations with major US technology corporations.

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