AUD Shares Rose Thanks to Commodity Stocks

Must Read

The last trading day was successful for Australian shares. Commodity stocks led gains, showing that the Australian pulse is becoming resilient amidst rising inflation and longer interest rates.

According to Reuters correspondent Echha Jain, “The S&P/ASX 200 index .AXJO ended 0.5 per cent up at 7,258.40, in line with global markets. For the month, the index shed 2.9 per cent. Data from the Australian Bureau of Statistics (ABS) earlier in the day showed retail sales rebounded in January, though the underlying pace was slowing.”

Jain noted what eToro market analyst Josh Gilbert stated, wherein the Reserve Bank of Australia’s (RBA) rate hikes are now showing their desired effects on consumers. Gilbert concluded that retail sales are slowing down despite showing a rebound due to consumer resilience.

He added that investors are looking for direction on what the RBA would take on rate hikes, and analysts are predicting that the economy may grow 0.7 per cent in the December quarter and a further 2.7 per cent for the year.

Gilbert noted, “This reading now throws the ball back into the RBA’s court, with the economy starting to weaken but inflation still elevated heading into next week’s rate decision. The Reserve Bank may still decide to raise rates, but the peak of this cycle is in touching distance.”

Other experts also noted that many commodity markets are beginning to respond to data outside the US, reflecting on its performance as Chinese manufacturing activities have grown exponentially.

According to Fiona Cincotta, a market analyst for Forex, the growth of Chinese manufacturing activity was at its fastest in over a decade, demonstrating that the second-largest economy is making a solid recovery. She also noted that the strong recovery might be inflationary and end up in a no-landing scenario.

The market analyst added that traders are pricing at a higher terminal rate of 5.25 to 5.5 per cent as the fears of persistently high inflation and interest rates for longer impacted the risk sentiment for the previous month.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img