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FIVE at FIVE AU: ASX rises on consumer sentiment and softer inflation report

Published 11/01/2024, 04:02 pm
Updated 11/01/2024, 04:30 pm
© Reuters.  FIVE at FIVE AU: ASX rises on consumer sentiment and softer inflation report
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The performance of retail and bank sectors today, pushed the ASX higher.

The S&P/ASX200 gained 37.00 points or 0.50% to 7,505.50. Over the last five days, the index is virtually unchanged, but is currently 1.67% below its 52-week high.

Top-performing stocks in this index are Core Lithium and Iluka Resources, up 5.26% and 4.77% respectively.

Nine out of the index’s 11 sectors were green, with higher consumer-related and tech stocks offsetting mining sector losses. Information Technology gained 1.15%, Consumer Discretionary was 0.83% higher and Financials gained 1.00%.

During the day, CBA was up nearly 1.2% to $113.36, Westpac also by as much at $23.25, NAB put on 0.9% to $31 and ANZ lifted 0.8% to $26.

Consumer sentiment was buoyed by a softer-than-expected inflation report which reinforced expectations of earlier rate cuts this year.

Strong performers throughout the day were JB Hi-Fi Ltd, up 3.8% moving toward a two-year high of $56.85. It is currently $56.67. Light &Wonder Ltd was up 2.7% and Collins Food Ltd gained 1.4%.

On the downside, Energy dropped 0.04% and Utilities lost 0.12%.

Iron Ore extended its losses to a sixth consecutive session.

As for small caps, the S&P/ASX Small Ordinaries (XSO) gained 0.36% for the day to 2,882.70. Over the last five days, it is 0.55% higher.

Lowest inflation in nearly two years

In November, Australia experienced a significant decline in inflation, reaching its lowest point in almost two years. This unexpected easing was accompanied by a marked reduction in core inflation. The data, which came in softer than anticipated, has strengthened the belief in financial markets that there may be no further need for an increase in interest rates.

The Australian Bureau of Statistics released data on Wednesday indicating that the monthly consumer price index (CPI) increased by 4.3% annually in November, marking the slowest growth since January 2022. This figure represents a decrease from the 4.9% recorded in October and falls below the market prediction of 4.4%.

Head of market economics at National Australia Bank Tapas Strickland said the data challenged NAB's view of another rate rise in February. However, sticky services inflation did not support any rate cuts in the first half of the year.

"So the biggest insight from today's release was nothing really challenges RBA's forecast, but also nothing really to say the pace of disinflation is faster than the RBA thought," Strickland said.

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