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May 23 Markets at a glance: ASX falls & BHP retreats as Anglo rebuffs bid

Global equity markets falter as investors digest the implications of a more patient approach to interest rate cuts.

Equity markets are lower across the Asian region, as investors digest the implications of a ‘higher-for-longer’ interest rate environment.

The Australian S&P/ASX200 is one of the biggest decliners, hurt by a pullback in key commodity prices. Gold is lower, retreating from its record high of $2,449.89/oz hit on Monday, while the price of oil is also under pressure. The broader mining index has retreated and on track for its worst session day since mid-March.

Financials and rate-sensitive real estate stocks are also weaker in today’s trade.

US futures however are higher, after Nvidia (NASDAQ: NVDA) forecast quarterly revenue above analyst estimates, which sent shares soaring in after hours trade. The stock is up around 90% this year, building on 2023’s near 240% surge.

On the interest rate outlook, markets are pricing in a 59% chance the US Fed will cut rates by at least 25 basis points at its September meeting, down from 65.7% in the prior session, according to CME’s FedWatch Tool.

In currency markets, the kiwi has held its ground despite a strong US dollar, as the RBNZ ‘out-hawks’ the Fed. The Australian dollar is trading flat, not helped by lower commodity prices.

Looking at company news, Australian listed shares of BHP (BHP) are lower after its takeover target Anglo American rejected the miner’s third buyout proposal valuing it at just over AU$49 billion.

Nufarm (NUF) shares are in the red, posting their biggest intraday percentage decline since May 2022 as the company’s first half underlying EBITDA missed consensus estimate, with a 4 AU cent dividend declared, below last year’s 5 AU cents.

In stark contrast, shares of Australian listed Xero Ltd (XRO) are eying their best day in a year as the New Zealand-based payroll software company swung back to black posting a full year net profit after tax of NZ$174.6 million, compared to a loss of NZ$113.5 million last year.

Aristocrat Leisure (ALL) and Orica (ORI) are trading ex-dividend.

All prices and analysis at 23 May 2024.  The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.

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