Local market suspended in flat
Mixed leads overnight set the tone for Thursday trading. Investors were still pondering inflation numbers and what it means for the timing of a future rate cut. High yielding stocks were under scrutiny and were subjected to downward pressure. The big banks and Telstra all saw a little fat trimmed off their value as traders switched to materials.
Fortescue issued official notice of the completion of their US$2.3Bn bond issue. The Iron Ore miner attempted a similar issuance just four weeks ago but was not prepared to pay the rate offered. Fortescue’s price climbed 12% across the trading day, boosted by both a surge in Iron Ore overnight and the completion of their bond through sole lead JP Morgan.
The other major miners BHP and RIO also enjoyed the fruits of Iron Ore strength. Both Iron Ore producers secured gains of over 1.5% to their share prices across the trading day. HSBC’s Flash PMI blew the wind out the sails in afternoon trade for the miners who both finished in the green.
The HSBC Flash Manufacturing PMI print returned the lowest read in the past 12 months. The Aussie dollar immediately took a tumble to the session’s low of 0.772. The local currency recovered minutes later to resume trading around US 0.773 ranges. Australian equities shrugged on the 12 month low print to continue to see saw in mild red territory. Employment claims due from the US overnight may have a bearing as to whether the Aussie dollar will hold into the 0.77 handle.
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Frequently Asked Questions about this Article…
The mixed leads overnight set a cautious tone for Thursday trading, as investors were still considering the implications of recent inflation numbers and the potential timing of a future rate cut.
High yielding stocks faced downward pressure as traders shifted their focus to materials, leading to a slight decrease in value for big banks and Telstra.
Fortescue's stock price climbed 12% during the trading day, buoyed by the successful completion of their US$2.3 billion bond issue and a surge in Iron Ore prices.
BHP and RIO both experienced gains of over 1.5% in their share prices, benefiting from the strength in Iron Ore prices.
The HSBC Flash Manufacturing PMI reported its lowest reading in 12 months, which initially impacted the miners negatively, but they still managed to finish in the green.
The Australian dollar dropped to a session low of 0.772 following the PMI report but quickly recovered to trade around the 0.773 range.
Despite the 12-month low PMI print, Australian equities continued to fluctuate in mild red territory, showing resilience in the face of the negative data.
Upcoming employment claims data from the US could impact whether the Australian dollar maintains its position around the 0.77 handle.
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