Markets at a glance 24 September

Around the grounds         

The Australian share market has extended losses in today’s trade after the Reserve Bank of Australia (RBA), as expected held the cash-rate steady at 4.35%, a twelve year high, and reiterated that policy needed to stay tight, sticking to script a week after the US Federal Reserve started its easing campaign with a super-sized 50 basis point cut.

The hawkish stance sent the Australian dollar (AUD) soaring to a nine-month high, with futures markets paring back the chance of a December cut to 59% from the 64% chance before the decision. To the all-important statement, policy makers said, "while headline inflation will decline for a time, underlying inflation is more indicative of inflation momentum, and it remains too high," largely unchanged wording from the August statement.

Looking ahead, investors are eyeing tomorrow’s inflation print for August, with the headline number expected to have slowed to an annual rate of 2.7%, largely due to the government’s electricity rebates, though the core gauge is expected to remain sticky.

Back to the local equity market, miners are giving the bourse a boost as the price of iron ore recouped earlier losses as China unveiled a wave of new monetary stimulus.

The most-traded January iron ore contract on China’s Dalian exchange was up over half a per cent, while the benchmark October iron ore on the Singapore exchange has surged over 2%.

The mining sub-index is down over 18% this year as of last close, compared to a 7.4% rise in the benchmark.

Energy stocks are also higher, as oil prices gain on concerns of a wider Middle East conflict and a tropical storm that could impact output in the US. The sub-index on track for its sixth straight session of gains.

In the news

Quick check in on some of the day’s corporate plays. The lithium space is in focus as the United States backs an Australian lithium and a rare earths project with up to AU$786 million in debt funding as the West seek to build supply chains for critical minerals.

The move is part of the critical minerals taskforce established between the US and Australia last year as Australia looked to attract investment in minerals processing from allied countries in a bid to reduce reliance on China, which currently holds more than 80% of the global supply.

Staying in the soft-commodity space, ASX-listed uranium miners are on the rise amid reports US -based Constellation Energy (NASDAQ: CEG) and Microsoft (NASDAQ: MSFT) are looking to ink a power deal to revive a unit of a nuclear power plant.

Australian listed shares of Perth-based Boss Energy (ASX: BOE), Paladin Energy (ASX: PDN) and Deep Yellow (ASX: DYL) are all higher by between 7.5 and 10.3% in today’s trade.

Finally shares of Cettire (ASX:CTT) have jumped over 65%, after the luxury goods retailer said an independent auditor has approved it fiscal 2024 financial statements. Last month the company flagged a delay in the audit related to its revenue recognition strategy.

The stock though is still down nearly 33% YTD, including today’s move.

Going global

Rounding things out on the global stage and Japan has come back from a holiday yesterday with a bang. Tokyo’s Nikkei 225 has scaled a three-week peak buoyed by moves on Wall Street and dovish comments from the Bank of Japan (BoJ) at the end of last week which has helped boost investor sentiment.

China’s stimulus measures are also bolstering sentiment, with stocks around the Asian region touching their highest level in more than two and a half years. In a hotly anticipated press conference, China’s top financial regulators unveiled a raft of measures, saying it would cut bank reserves by 50 basis points while reducing mortgage rates in a bid to try and spur slugging economic growth.

The moves have seen Chinese stocks jump, with Hong Kong’s Hang Seng index up over 2% in the early throws of the Asian session. In turn that has pushed MSCI’s broadest index of Asia-Pacific outside Japan up 0.41% to 588.43, a level not seen since April 2022.  

Finally, to the days currency plays, the dollar index has continued to hover near a one-year low touched last week, while the yen is little changed, and the euro is steady recovering earlier losses after eurozone business activity data disappointed, raising expectations for more interest rate cuts by the European Central bank (ECB) this year.

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