The S&P/ASX200 edged lower today, losing 25.90 points or 0.36% to 7,253.10 by 2.40pm (AEST), despite crossing above its 125-day moving average.
The bottom-performing stocks in the index were AMP Ltd and Nickel Industries Ltd, down 5.48% and 3.21% respectively.
Over the last five days, the exchange has gained 0.79% and is currently 4.16% off of its 52-week high.
Communications stocks were the brightest spot on a bleak sector board, up 0.73%, with Utilities (0.53%) bringing up the rear and Real Estate barely in the black (0.05%).
At the other end of proceedings, Financials (0.70%), Information Technology (0.58%) and Health Care (0.64%) led the downward momentum.
What’s on the horizon?
eToro market analyst Josh Gilbert held forth on what’s next for the RBA, oil prices in the near term and ongoing consumer demand:
“It’s worth noting that this is more than likely a ‘skip’ from the RBA rather than the end – we’re in a ‘wait and see’ scenario, with quarterly CPI likely a key focus for the board.
“However, if the data continues to move in the right direction, then there is a possibility that we’ve seen the last hike from the RBA. I don’t feel that metrics such as inflation and unemployment will move significantly enough for the ‘data dependant’ RBA not to hike again, especially with Lowe’s labour market headache.
“Oil jumped again, with crude gaining 5% in the last five days while investors digest Saudi Arabia's and Russia's latest efforts to support prices by cutting supply.
The macro backdrop remains a clear headwind for oil prices, especially with China’s recovery lagging. The uncertainty from oil prices will remain an overhang for local energy stocks in the meantime. A global slowdown is still expected, but we may see some positivity today with black gold gaining.
“Despite consumers pulling back as household budgets are squeezed, the demand for travel is not subsiding. That means investors owning local travel stocks such as Qantas are likely to keep reaping the rewards," Gilbert said.
“Commercial passenger jet fuel demand, a proxy for travel, is showing a 38% increase year-on-year in Asia, thanks in part to China’s re-opening, but a 21% increase worldwide. These numbers continue to climb week on week, meaning that as long as demand stays high, airliners can keep airfares elevated. That’s good news for Qantas’ investors as it’s a sign the airliner’s forecasted record profits may not be a flash in the pan.”
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