The Australian Securities Exchange (ASX) pivoted down on Wednesday (20 November) as the Russia-Ukraine conflict escalated and the Reserve Bank of Australia failed to provide more certainty around rate cuts.
The S&P/ASX200 slipped 18.30 points, or 0.22%, to 8,355.70 points at 10.36am AEDT, after setting a new 52-week high at close yesterday. Over the last five days, the index has gained 1.98% and is currently 1.07% off of its 52-week high.
Sectors were mixed, with just three of the 11 in the green, led by utilities which edged up 0.24%. Energy rose 0.12%, while materials made a slight 0.02% move backwards.
CommSec economist Harry Ottley says US equities were under pressure early in the overnight session as geopolitical concerns stemming from the war in Ukraine ratcheted higher.
“A rush to safety sent US bond yields sharply lower, before a more risk-on mood took hold later in the session,” he says.
While US equities recovered later in the session, Australian investors remained cautious as the Reserve Bank of Australia minutes released yesterday suggest a February 2025 rate cut will only be likely if the economic outlook softens relative to the RBA’s forecasts.
“The minutes contained mixed messages in our view. While the board is alert to the importance of being forward looking, key sections of the minutes indicated they were still highly reliant on incoming data,” Ottley says.
The mounting Russia-Ukraine tensions pushed gold higher as investors flocked back to safehaven assets.
Spot gold is trading around $US2,643 ($4,045) an ounce.
Gold miner Genesis Minerals (ASX:GMD) gained 2.27% to $2.48. Uranium miners were again in favour with investors, with Boss Energy (ASX:BOE) advancing 3.28% to $3.15 and Paladin Energy (ASX:PDN) climbing 2.53% to $8.10.
Mineral Resources (ASX:MIN) also gained ground, adding 2.93% to its share price to trade at $35.87 early in the session.
The S&P/ASX 200 Volatility Index (A-VIX) dipped 0.37 points, or 3.25%, to 10.99 points. The index has lost 0.26% over the past five days and 7.29% over the last year.
Also known as the ‘fear’ index, the A-VIX is a real-time volatility index that provides an insight into investor sentiment and expected levels of market volatility.
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 & Unsplash
