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