The ASX bounced back this afternoon after a choppy morning, finding support from the Industrials and Financial sectors. The ASX 200 finished the day up 0.56% at 7,075 points.
The major banks each logged gains — NAB added 1.87%, CBA finished 1.12% higher, ANZ gained 0.95% and Westpac ended 1.04% higher. Iress Ltd also had a strong day, jumping 14.7% after upgrading its earnings guidance for the 2023 calendar.
Industrials were lifted by strength in Transurban Group (ASX:TCL), Brambles (ASX:BXB) and Reece Ltd (ASX:REH).
Utilities were out of favour, losing 1.19% led by falls of more than 2.3% in both AGL Energy (ASX:AGL) (ASX:AGK) as well as Origin Energy Ltd (ASX:ORG), which rebuked a revised acquisition bid from Brookfield.
Read more: Origin Energy rejects revised Brookfield takeover bid as "incomplete"
Treasurer Jim Chalmers has welcomed a projection by the OECD in its world economic outlook, released overnight, that the RBA has probably reached its interest rate peak. But Chalmers played down the prospect of the government posting a second successive budget surplus.
According to the OECD report, “The projections assume that the cash rate will be held at this restrictive level until inflation is clearly declining to the target band, with 75 basis points of interest rate cuts assumed between the third quarter of 2024 and end-2025.”
This comes ahead of the RBA’s final rates meeting for the year on Tuesday and follows its decision to lift the cash rate to 12-year highs of 4.35% earlier his month.
The RBA is widely expected to hold rates steady on Tuesday — markets are pricing in just a 2% chance of a rate hike. The central bank won’t meet again until February and at this stage, it looks unlikely that the RBA will lift the cash rate next year.
This idea is supported by October consumer price inflation data that came in weaker than expected, easing to a 4.9% annual rate against expectations of 5.2% and down from September’s 5.6% annual rate.
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