The ASX fell 0.67% today, having been on somewhat of a roller coaster this week with its sudden ups and downs.
The 48.5-point loss brings the bourse below its 125-day moving average, although the index is now flat for the week.
The sectors were subsequently in the red. Materials (-1.52%), Consumer Discretionary (-1.11%) and Health Care (-1.14%) took the biggest hits with just Energy (+0.58%), Utilities (+0.17%) and Consumer Staples (+0.22%) escaping the bloodletting.
Commodities were in a similar state with only West Texas Crude (+2.74%) gaining, and tin taking the most damage (-3.79%).
Lovisa Holdings Ltd and Eager Automotive Limited were the hardest hit stocks on the ASX200 today, shedding 7.06% and 4.66% respectively.
In the news today
Risk of stagflation still a concern for BoE
All eyes will be on the Bank of England (BoE) this afternoon, as the UK inflation data is set to be released.
The latest CPI data will inform whether the BoE will hike interest rates in the UK once again.
Capital.com senior market analyst Daniela Hathorn believes the central bank will be hiking rates regardless of potential CPI softening.
“Even if we see a drop in CPI to 8%, inflation remains dangerously high given that consumer spending and growth have started to slow,” Harthon stated.
“Moreover, the ongoing industrial action taking place across various sectors will only put further pressure on wages, keeping domestic inflation elevated.
“This is also evidenced by analyst consensus showing no drop in core CPI for April, staying at 6.2%.
“So, given the elevated risk of stagflation, the BoE is in no position to be lenient with its policy despite the impact of tighter financial conditions on consumers and households.
“The reaction to the CPI data may be slightly confusing at first, because if we do see a reduction in price pressures the market may react negatively to this data given concerns about a more dovish BoE,” Hathorn clarified.
“On the other hand, a reading above expectations or little changed from the previous month – or dare I say it, higher than 10.1% - may see a stronger pound simply because it keeps the BoE on track with regards to the hiking cycle.”
Aussies choose travel and lifestyle over mortgage
As interest rates rise and the global economy hesitates on the edge of stagflation, many Australians are opting out of the housing arms race altogether.
Insignia Financial’s inaugural Financial Freedom Report has highlighted changing attitudes to finance in Australia, as the average punter adjusts to the new economic reality.
Aspirations have shifted somewhat, with more than half (55%) of Australians pointing to financial independence as their main motivator, followed closely by taking regular holidays (50%).
Maintaining a good work/life balance (45%) tied with homeownership percentage-wise, but when pressed 60% of respondents indicated they cared more about pursuing their dream lifestyle than owning their dream home.
Tellingly, when asked whether they could maintain their current lifestyle over the next two years, 56% of Australians expressed doubt, compared to 44% who were confident they would be able to.
“It’s clear Australians have changed their priorities in life from the traditional dream of owning a home to living their dream lifestyle, which, is under pressure from the current economic climate,” Insignia Financial CEO Renato Mota said.
“Australians are deeply aware of their financial well-being because it ultimately enables them to achieve the things that matter most to them, whether that be travel or spending time with loved ones.
“Financial independence means something different to everyone, and as part of our ambition to create financial well-being for every Australian, we want to help bring this to life.”
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Island Pharmaceuticals sees tremendous opportunity for mosquito-borne virus program
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