The release of US consumer price index data overnight has added more weight to the US Federal Reserve potentially cutting rates next month, which is again lifting markets.
While the US CPI increased 0.2% in July compared to a 0.1% drop the month before, it was the smallest year-on-year rise since April 2021 and industry commentators believe it is sufficient enough to keep the Fed on track for a rate cut next month.
However, a half-percentage point cut is less likely which has mellowed the momentum.
Jeffrey Roach, chief economist at LPL Financial, was quoted by the Australian Financial Review as saying that as inflation decelerates, the Fed can legitimately cut rates yet keep policy restrictive overall.
The S&P/ASX200 advanced 23.10 points to 7,873.80 points this morning (15 August) at 10:09am AEST.
Ten of the 11 sectors are higher over the last week, along with the S&P/ASX 200 Index.
The top gainers featured gas explorer Strike Energy (ASX:STX) and medical imaging provider Pro Medicus (ASX:PME) which moved up 8.8% and 7.2% respectively.
The bottom performers were dominated by iron ore producers, with Mineral Resources (ASX:MIN) sliding 4.6%, Fortescue Metals Group (ASX:FMG) down 4.6% and Champion Iron (ASX:CIA) falling 3.8%.
Over the last five days, the index has gained 2.5% and is currently 3.37% off its 52-week high.
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: Stock
