The ASX edged modestly higher in early trade today (30 January) as weaker inflation data released yesterday points to an increased likelihood the Reserve Bank of Australia will cut rates.
The S&P/ASX 200 is up 8.2 points to 8,455.2 as of 10.30am AEDT.
Over the last five days, the index has gained 0.91% and is sitting 0.7% below its 52-week high.
Six of the 11 sectors started the day higher. Materials is the best performing sector, adding 0.22% and rebounding from its recent decline. The sector is down 0.13% over the past five days.
Energy lifted 0.11%, while utilities and industrials started the trading session in the red.
The RBA Rate Indicator has climbed to 95.745, indicating a 95% expectation of an interest rate cut to 4.10% at the February meeting. Expectations have risen from 73% in mid-January.
In the US, markets fell overnight after the Federal Reserve held rates between 4.25% and 4.5%, with Chairman Jerome Powell saying he wants to see inflation come down further, indicating the Fed is not in a hurry to adjust its policy stance.
ANZ Senior Economist Catherine Birch says there is no definitive signal on whether the Fed will ease in March.
“There are two inflation and two labour market prints due ahead of the March meeting,” she says.
The Bank of Canada cut its rates by 25 basis points, in line with market expectations, as did Sweden’s Riksbank.
Boss Energy (ASX:BOE) continued its run up, moving ahead a further 3.67% to $3.11, while gold miner Emerald Resources (ASX:EMR) climbed 2.83% to $4 and Whitehaven Coal (ASX:WHC) rose 2.81% to $6.22.
Mineral Resources (ASX:MIN) slipped 6.35% to $33.95 after the opening bell, while Champion Iron (ASX:CIA) lost 3.6% to trade at $5.36 and IGO (ASX:IGO) slipped 3.11% to $4.99.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Reserve Bank of Australia
