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ASX up 0.63% at noon as wage growth comes in lower than expected

PUBLISHED

2023-08-15

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The Australian dollar experienced a decrease in value following the release of second quarter wages data that fell short of expectations. This development strengthens the argument for the Reserve Bank of Australia to maintain current interest rates without making any adjustments. The Australian dollar was trading at 64.7 US cents, down from around 64.9 cents before the data release. Concurrently, the three-year bond yield decreased from 3.97% to 3.94%.

Wages grew by 0.8% in the second quarter, which was below the anticipated 0.9% growth, resulting in a yearly wages growth rate of 3.6%. This annual growth is also lower than the forecasted 3.7% and represents a deceleration from the 3.7% growth observed in the preceding March quarter.

Additionally, the Reserve Bank of Australia's released minutes indicated that while inflation data was viewed as positive, the bank believed there was a credible strategy to guide inflation back within its targeted range of 2 to 3%.

Overall, at noon, the S&P/ASX 200 is 0.63 per cent higher at 7,323.

The SPI futures are pointing to a rise of 27 points.

Best and worst performers

The best-performing sector is Health Care, up 3.23 per cent. The worst-performing sector is REITs, down 0.44 per cent.

The best-performing large cap is Pro Medicus (ASX:PME), trading 6.42 per cent higher at $74.09. It is followed by shares in Cochlear (ASX:COH) and carsales.com (ASX:CAR).

The worst-performing large cap is SEEK (ASX:SEK), trading 6.56 per cent lower at $24.07. It is followed by shares in Mercury NZ (ASX:MCY) and Cleanaway Waste Management (ASX:CWY).

Asian markets

Asia-Pacific markets were mixed on Tuesday ahead of key economic data out from China, which will release its industrial output and retail sales figures for July.

Japan’s Nikkei 225 climbed 0.62%, while the Topix was up 0.48% after the country saw its second quarter gross domestic product beat expectations.

The economy grew 1.5% quarter on quarter and 6% on an annualized basis, compared to expectations of 0.8% and 3.1% respectively, according to economists polled by Reuters.

Hong Kong’s Hang Seng index extended losses and slid 0.96%, while the CSI 300, a benchmark index for mainland Chinese markets, fell marginally. South Korea’s markets are closed for a public holiday.

Company news

Lake Resources (ASX:LKE) completes an intermediate milestone to achieve DFS with successful extraction and injection tests at its flagship Kachi Project. In response, Lake CEO David Dickson said, “The tests represent a significant milestone for the Project, as they provide important data and higher confidence for our modelling, which is essential for the completion of our DFS for Phase 1.” Shares are trading 23.8 per cent higher at 26 cents.

Chimeric Therapeutics (ASX:CHM) announced positive in vitro data for CHM 0301, its next generation armoured natural killer (NK) cell platform. The platform is designed to maximise potency and enable the cells to overcome immune-suppressive tumour microenvironments. Shares are trading flat at 3.8 cents.

Sunstone Metals (ASX:STM) announced that the Limon deposit within the Bramaderos Gold-Copper Project, in Southern Ecuador, continues to grow with further wide high-grade intersections. In response, Managing Director Malcolm Norris said, “These results show that Limon is now clearly a major shallow high-grade gold-silver discovery which will underpin a significant increase in the scale, grade and development prospects for Bramaderos.” Shares are trading 7.14 per cent lower at 2.6 cents.

Commodities and the dollar

Gold is trading at US$1937.70 an ounce.

Iron ore is 1.6 per cent lower at US$103.45 a tonne.

Iron ore futures are pointing to a 0.41 per cent rise.

One Australian dollar is buying 64.85 US cents. 

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