Australian Stock Market Shows Modest Gains As Global Inflation Improves

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As the market closed last 28 March, the S&P/ASX 200 was at 7,050.30, seeing a 0.23 per cent. The increase is seen as a positive outlook for investors, banking that the Reserve Bank of Australia (RBA) will hit the pause button in tightening its policy.

The ASX is showing its resiliency despite the recent economic blows brought about by the collapse of SVB last 14 March and the recent takeover of Credit Suisse by UBS two days later. SVB was forced to close shop as the federal government stepped in. As the bank collapsed in just 48 hours, its effects began to ripple in the global markets.

According to News Nation correspondent Joe Khalil, “The collapse seems to be making all mid-sized banks reconsider how they lend money to clients, or whether mid-sized, regional banks could share the same fate.”

With the turmoil of Credit Suisse, ASX closed at 6,965.5 points, losing around 1.46 per cent on 16 March. And four days later, the Australian market fell to its 50-day low. ASX opened lower at 6,940 points at midday, with global investment bank Macquarie trading down at -3.1 per cent and insurer Suncorp dropping -3.8 per cent to $11.69. 

The following day, the ASX closed higher. According to the ASX Market Watch, “the index gained 56.90 points or 0.82 per cent to close at 6,955.40. The rebound was partly due to the release of the official minutes of the RBA’s March Board meeting, in which the Board members flagged halting hikes in April.”

However, despite these significant challenges, the economy has shown lower inflation. According to City Index senior analyst Matt Simpson, the RBA (Reserve Bank of Australia) is looking for a reason to get out of hiking, and I think they’ve got their reasons.”

“The ASX’s 11 official sectors finished mixed, with eight up and three down. The two commodities sectors, energy and materials, were the biggest gainers, rising 1.2 per cent as iron ore and oil prices climbed,” noted Derek Rose, a journalist for the Western Australian.

According to the Rose, Fortescue Metals was up 2.9 per cent to $21.16, BHP was up 1.4 per cent to $45, and Rio Tinto was up 0.7 per cent to $115.18. Lithium developer Liontown Resources was up 0.8 per cent to $2.59, while Allkem rose 3.5 per cent and Pilbara by 2.3 per cent.

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