Market Open: ASX set to slip as investors weigh RBA rate hike

Australian shares are expected to open lower on Wednesday, with SPI futures pointing to a softer start as investors weigh the impact of the Reserve Bank’s latest rate increase against a mixed session on Wall Street.

The S&P/ASX 200 added 30.3 points, or 0.34%, to close at 8,886.8 on Tuesday, recovering from its opening level of 8,856.5 despite the RBA lifting the cash rate by 25 basis points to 4.85%.

The advance was uneven, with seven of the 11 sectors finishing higher. Real Estate led the gains, climbing 2.88%, followed by Consumer Discretionary (+1.87%) and Telecommunications (+1.72%). Energy was the weakest performer, tumbling 3.45%, while Health Care and Materials also finished lower.

Wall Street’s technology-led recovery

US markets delivered a mixed performance overnight, with the Nasdaq gaining 0.8% to 25,372.01 and the S&P 500 adding 0.4% to 7,568.92. The Dow Jones slipped 0.4% to 51,786.72.

Technology and AI-related stocks provided support, led by gains in Nvidia and Broadcom, although the broader market remained less convincing, with most S&P 500 stocks finishing lower. Apple fell after warning that higher memory-chip costs could weigh on profitability.

Investors are also watching the US midterm elections, with the outcome potentially influencing the outlook for corporate regulation, technology policy and government spending.

RBA decision leaves investors weighing what comes next

The RBA’s fifth rate increase this year takes the official cash rate to its highest level since November 2008.

The decision was split six to three, with three board members favouring no change. The accompanying statement also suggested the Board may be approaching a more cautious position on additional increases.

Investors will be watching how the higher borrowing costs affect interest-rate-sensitive sectors, particularly property, retail and financial stocks.

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The ABS releases its September Monthly Household Spending Indicator and Selected Living Cost Indexes at 11.30am AEDT.

The figures will provide another look at household spending and the cost-of-living pressures facing Australian consumers following the latest RBA increase.

The ASX’s ability to hold Tuesday’s gains will be a key test, particularly across property and consumer stocks following the rate decision.

Energy stocks will also remain in focus after the sector’s sharp decline, with oil prices continuing to retreat. Resources investors will be watching gold and industrial metals for signs of support.

Gold Mountain (ASX: GMN) has obtained high-grade tungsten results at the Malhada do Angico mine;

Black Canyon (ASX: BCA) has identified iron and manganese with Wandanya extension drill results;

Koonenberry Gold (ASX: KNB) has advanced multiple exploration programs across portfolio;

High-Tech Metals (ASX: HTM) is advancing drilling for rapid resource growth at Damsel gold deposit; and

Buxton Resources (ASX: BUX) has secured a rig for maiden Wolverine drill program.

Bitcoin was trading around US$77,600, up approximately 1.2% on the latest available market snapshot, as cryptocurrency markets attempted to stabilise following recent volatility.

Ethereum was trading around US$2,292, with digital assets continuing to attract attention amid shifting risk sentiment across global markets.

That’s HotCopper’s Market Open, I’m Colin Sandell-Hay – happy trading.

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The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.