ASX Today: ASX rallies as core CPI stays at 3.6%, but not a good day for everyone

The ABS today unveiled CPI inflation for August, showing that headline CPI has climbed 4% since last August due largely to fuel prices. That number is well outside the RBA’s 2-3% target band.

So it was perhaps counterintuitive that the market rallied on the news with the XJO climbing up just shy of +1% higher in the hour following the data release.

That’s because expectations for headline CPI were higher, at 4.1% – meaning we beat the expectations by one tenth of a percent growth; or one pip if you will. But after the ASX200 has already shed billions in value over the last few weeks, maybe it’s not surprising any not-terrible-news is good news.

That said, heading into the final two hours of trade, the initial rally pared back to leave the XJO up +0.7%. Still, not anything to sniff at.

Perhaps more important is that core inflation – or Trimmed Mean Inflation (TMI), to use the technically correct Australian parlance – remains steady at 3.6%. However, the impact of higher fuel prices may yet bleed into further TMI reads.

Usually, the market responds predominantly to headline CPI more than core (I find it’s easier to just say that than refer to TMI), but perhaps this time that wasn’t the case.

Notably, the Real Estate sector surged back over +3% today following yesterday’s RBA rate hike. While we’re still two hours out from close at the time of writing, it’s been a relative good day to be sure – but it wasn’t the case for everyone.

Paradigm Biopharmaceuticals today disappointed many investors after voluntary administrators were brought in following the failure of its be-all-end-all osteoarthritis trial last week. With a share suspension extended today, many investors will be nervous.

Lindian Resources meanwhile also had a bad day down -23% a/a 2pm AEST after coming out of a trading halt as the company cited regulations it’s dealing with in the African nation of Malawi remain unchanged.

Black Cat Syndicate also fell after it revealed gold production guidance for FY2Y7 will come in under 100Koz, which wasn’t to the liking of all investors.

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