AU Evening Wrap: ASX 200 Declines Amid Higher-Than-Expected Inflation
Market Performance
The Australian $S&P/ASX 200 (.XJO.AU)$ index witnessed a downturn, ending the day 0.7% lower at 7783.0, following the release of inflation figures that exceeded anticipations. This economic development led market participants to speculate on a potential interest rate hike. The inflation rate, which escalated to 4.0% in May from the previous 3.6%, fueled these predictions.
The majority of the market sectors suffered losses, with eight out of eleven sectors in the negative territory. Notably, the prominent financial and materials sectors declined by 0.9% and 0.6%, respectively. Despite a late surge in lithium stocks, gold producers experienced a downturn, and major iron ore mining firms $Fortescue Ltd (FMG.AU)$ and $Rio Tinto Ltd (RIO.AU)$ saw their shares drop by 0.2% and 0.4%. $BHP Group Ltd (BHP.AU)$'s shares remained unchanged.
The banking sector also faced headwinds, with $Westpac Banking Corp (WBC.AU)$, $CommBank (CBA.AU)$, $National Australia Bank Ltd (NAB.AU)$, and $ANZ Group Holdings Ltd (ANZ.AU)$ shares falling in a range between 0.6% and 1.3%.
Top News
Australian Inflation Reaches Six-Month Peak in May, Heightening Rate Hike Prospects
In May, Australian consumer inflation surged to its highest level in six months, accompanied by a sustained increase in a principal gauge of core prices for the fourth consecutive month. These unexpected statistics took traders by surprise, prompting financial markets to adjust their forecasts significantly regarding the Reserve Bank of Australia's monetary policy decisions. The likelihood of an interest rate increase by the year's end has now escalated, with market predictions indicating a 60% probability of a quarter-point rate hike by November—a sharp contrast to the previously negligible expectations prior to the release of this data. The anticipation of a rate adjustment will be keenly attuned to the forthcoming comprehensive second-quarter CPI report, which could potentially confirm a policy shift as early as August.
BHP Group Commits to a 30% Reduction in Operational Greenhouse Gas Emissions by 2030
$BHP Group Ltd (BHP.AU)$ announced its commitment to a significant reduction in its operational greenhouse gas emissions. The multinational mining company is set to achieve at least a 30% decrease by the fiscal year 2030, using FY2020 as the baseline for measurements. Moreover, BHP is actively striving toward net zero emissions for its Scope 3 category by the year 2050, as outlined in their Wednesday filing with the Australian bourse.
Source: Dow Jones Newswires, AFR, ASX
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