AU Evening Wrap: Australia Shares End Marginally Higher As Retail Sales Beat Expectation
Market Performance
The Australian $S&P/ASX 200(.XJO.AU$ concluded the trading day with a modest gain of 0.3%, closing at 7739.9. The advance followed a day of steady trading, marked by a tight 24-point range, where the index consistently remained in positive territory. This performance came amidst a backdrop of divergent opinions among economists regarding the implications of unexpectedly robust retail sales figures, which showed a 0.6% increase in May, on the likelihood of the central bank implementing a rate hike.
Financial institutions exhibited a mixed response, with major banks such as $CommBank(CBA.AU$, $ANZ Group Holdings Ltd(ANZ.AU$, and $National Australia Bank Ltd(NAB.AU$ experiencing slight declines, ranging from 0.2% to 0.7%. Conversely, companies tied to consumer spending saw an upturn, benefitting from the positive sales data.
The materials sector, a significant component of the index, enjoyed a 1.1% uplift, bolstering the overall market. Leading the charge, prominent iron ore producers $BHP Group Ltd(BHP.AU$, $Rio Tinto Ltd(RIO.AU$, and $Fortescue Ltd(FMG.AU$ achieved gains between 1.1% and 1.6%, reflecting investor confidence in the commodities market.
Source: ASX
Top News
Australian Retail Sales Rebound in May, but Outlook Remains Dim
Despite a modest 0.6% uptick in Australian retail sales during May, the prevailing sentiment at the Reserve Bank of Australia (RBA) is that sales continue to languish. Abhijit Surya, an economist at Capital Economics, suggests that this fleeting recovery is unlikely to alter the RBA's stance that sales "are on the floor." A closer examination of the trend measure of retail sales indicates a consistent stagnation in sales values since the year's outset, he points out. Furthermore, sales volumes seem entrenched in weakness. Even with May's relatively robust improvement, projections by Capital Economics have sales volumes at a standstill throughout the second quarter.
Source: Dow Jones Newswires, AFR, ASX
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