Markets at a glance 23 September

Around the grounds         

The Australian share market has started the trading week on the back foot, as miners and consumer stocks slip, and traders sit on the sidelines ahead of the Reserve Bank of Australia’s (RBA) interest rate decision tomorrow.

The central bank is widely expected to keep rates on hold at a 12 year high of 4.35%. Looking ahead, investor focus remains fixed on local inflation data due on Wednesday, with forecasts for the print to fall to 2.7%, down from the 3.5% previously.

Rate-sensitive financials are lower, while miners shed over 1% with the sub-index on track for its worst intra-day decline since early September. Consumer stocks have also dropped, with Coles (ASX: COL) and Woolworths (ASX: WOW) leading the drag after news Australia’s competition regulator launched a law suit against the two giants for allegedly misleading customers about their discount pricing.

Bucking the broader trend, gold stocks, as the index rises over 1% an on track for a fourth straight session of gains. It comes as the price of bullion continues to hover near record highs, buoyed by momentum after the US Federal Reserve cut rates last week with signs of further reductions on the horizon.

The sub-index is up nearly 18% this year, as of last close.

In the news

Looking at some of the stocks to watch in today’s trade. Shares of Coles (ASX: COL) and Woolworths (ASX: WOW) are under pressure as the competition regulator sues the supermarket giants in the federal court for allegedly breaching the consumer law by making misleading claims about discounts.

ASIC will allege that while consumers understood the “Prices dropped” and “Down Down” promotional prices offered by the two supermarkets meant products were offered at lower prices, the new prices were actually higher than, or the same as, the previous regular price.

In response, Woolworths says it will review the claims and continue to engage with the ACCC on the matter.

Coles meantime says it takes compliance ‘extremely seriously’, and it intends to defend the proceedings.

Elsewhere, Australian listed shares of Healius (ASX: HLS) are tracking higher after the company said it would sell its diagnostic imaging arm Lumas Imaging to private equity firm Affinity Partners for an enterprise value of AU$965 million.

In March the company started a formal process to explore options for the sale as part of a strategic review after the Australian competition watch dog rejected its AU$1 billion takeover by Australian Clinical Labs (ASX: ACL) last year.

REA Group (ASX: REA) has sweetened its takeover offer for Britain’s Rightmove to AU$8.12 billion, after the UK’s largest real estate portal rejected an earlier offer which it said undervalued the company. Shares are lower in today’s trade.

Finally, Australian listed shares of Austal (ASX: ASB) have surged to touch a four-year high as the shipbuilder confirms it has been awarded a AU$152 million contract by the U.S. Navy to invest in infrastructure that supports the production of submarines. The stock is up around 47% YTD.

Going global

To the global stage, stocks around the region are steady as China surprises the markets, lowering its 14-day repo rate by 10 basis points, helping to nudge Chines blue chips higher. Elsewhere it’s thin trading in Asia with Japan on holiday, with the MSCI’s broadest index of Asia-Pacific shares outside Japan added around 0.2%, after bouncing nearly 3% last week.

US futures are back online and signal a modestly positive start to the trading week. The S&P is up 1% so far this month, historically the weakest month for stocks, and as gained a whopping 19% year-to-date to touch all-time highs.

Rounding things out in currency markets, that holiday in Japan has dulled most pairs. The big dollar is up against the yen, hitting its highest level in two weeks, the pound is a tick lower after the Bank of England (BoE) left rates unchanged last week, with its governor saying the central bank had to be ‘careful not to cut too fast or by too much’, and the Australian unit is a shade higher trading around the 68.2 US cent mark.

All prices and analysis at 23 September 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.