Stocks stumble on ASX as high inflation worries investors

Equities soared second this year on ASX when there was growing concern that higher-than-expected inflation data could push the Reserve Bank of Australia up interest rates.

The market exacerbated the early loss on January 25, after December quarter data showed that annual inflation rose to 3.5%.

With this high number, investors are concerned that the Reserve Bank of Australia (RBA) will raise interest rates in the near future.

The benchmark S & P / ASX200 index closed at 6,961.6 points and fell 177.9 points (2.49%).

Meanwhile, the All Ordinaries index hit a high of 2.6% (193.4 points) and closed at 7,248.1 points.

Energy share showed the worst performance, down about 4%. In addition, the share of materials, technology and assets suffered a loss of more than about 3 percent.

As higher inflation statistics became apparent, analysts began discussing the possibility of the RBA pushing up interest rates in 2022.

Core inflation has achieved its RBA target, according to Paul Bloxham, chief economist at HSBC Australia. But he said banks do not rely solely on that single means to make decisions.

“We hope the RBA will continue to focus on the need for stronger wage increases before considering hiking,” he said.

The Reserve Bank will hold its first meeting in 2022 on February 1st.

Epoch Times Photo
On May 5, 2015, men and women set foot in the headquarters of the Reserve Bank of Australia in Sydney, Australia. (Mark Metcalfe / Getty Images)

Meanwhile, in stock news, Zip, a financial tech company famous for installments, is in preliminary negotiations with rival Sezur, raising Sezur’s share price by 9.81% to $ 2.35 ($ 1.68). Meanwhile, Zip’s share price fell 2.13% to $ 3.21 (US $ 2.31).

The mining sector’s share price fell, and Rio Tinto’s share price fell 0.82% to $ 107.08 ($ 76.67). The company has US $ 7 billion with a Mongolian partner.

The company plans to start production at the Oyu Tolgoi mine in 2023 after the Mongolian government authorities have changed the financial terms.

Fortescue Metals’ second-quarter iron ore exports increased compared to the same period last year, achieving record first-half exports, but the company’s share price fell nearly 5% to $ 19.50 (13.60). The US dollar), and the BHP of competitors fell. From 1.25% to $ 45.03 ($ 32.24).

A mining company operating in Burkina Faso has also tried to appease investors as a West African country has just experienced a military coup, a democratically elected president has been detained by rebellious soldiers and the constitution has been suspended. did.

Perenti Global and West African Resources said there were no issues with staff safety and business operations.

Perenty fell from 10.65 percent to 75 cents (54 cents), while West African resources fell 16.86 percent to $ 1.06 (76 cents).

The Australian dollar was buying $ 71.37, which is $ 0.4 lower than the closing price on January 24th.

In the banking industry, ANZ is in the worst position among the major banks, down 3.6% to $ 26.77 ($ 19.17). The Federation, on the other hand, performed best, down 2% to $ 95.45 ($ 68.34).

Pedestrians are visible in the windows of the ANZ branch of the Australia-New Zealand Banking Group (ANZ) in central Sydney.
On October 25, 2017, a pedestrian is seen in the window of a branch of the Australian and New Zealand Banking Group (ANZ) in central Sydney, Australia. (Steven Saphore / Reuters)

Department store chain Meyer said COVID-19 blocked store sales in January and encouraged staff to focus on online sales.

In the five months to January 1, Meyer’s total sales increased 12% and its share increased 6.76% to $ 3.95 (US $ 2.83).

With ASX

* The Benchmark S & P / ASX200 Index closed at 6961.6 points on January 25, down 177.9 points, or 2.49 percent.

* The All Ordinaries index closed at 7,248.1 points, down 193.4 points, or 2.6%.

* At 1718 AEDT, the SPI200 futures index closed at 6,895 points and rose 18 points, or 0.26 percent.

Currency snapshot

Buy 1 Australian Dollar:

* 71.37 US cents, from 71.77 cents on January 24th

* From 81.27 yen and 81.51 yen

* From 63.26 cents to 63.15 euro cents

* From 52.99 pence, 52.88 pence

* From 106.98 NZ cents, 106.99 cents.

AAP contributed to this report.

Alfred buoy