Market Open: Volatile day expected on the ASX

ASX today – Following yesterday’s RBA rate increase the early indications point to a roughly flat opening ahead of a likely volatile session.

The SPI 200 futures are sitting at around 8,721, suggesting an initial gain of roughly 0.1–0.2% from Tuesday’s close of 8,709.3.

Wall Street was again down: the S&P 500 fell 0.2%, the Dow was down 0.3% and the Nasdaq slid 0.1% overnight.

The US 10-year yield was sitting at around 5.25%, creating a headwind for equities.

Brent crude was trading slightly lower, but is still keeping inflation concerns prominent.

The major Australian-specific factor is the RBA’s point 25 rate increase, which takes effect today. Higher Australian yields could put pressure on the banks, property stocks and other interest-rate-sensitive sectors.

This is likely to lead to mixed and volatile session rather than a strong directional move, with the RBA decision, bond yields, oil and miners likely determining the final direction.

The banks and major miners will be important for the index. Higher yields are a headwind for financials, while weaker gold/copper prices could weigh on resources. Energy stocks could receive some support from elevated oil prices.

Local market news

Meridian Energy (ASX: MEZ) has unveiled plans to upgrade the Waitaki power station;

Duketon Mining (ASX: DKM) has received positive split assay gold results from Barlee;

Olympio Metals (ASX: OLY) has hit a broad gold drill intercept at the Paquin prospect;

Gold Mountain (ASX: GMN) has obtained strong rare earth results at the Irajuba prospect; and

Black Canyon (ASX: BCA) has unveiled a Wandanya maiden MRE of 23.6Mt.

Buck and ore

Now – in forex, the Oz dollar is buying US$0.699

Looking at commodities, all in the greenback,

Iron Ore was down 0.20% to $96.73 per tonne in Singapore today,

Brent Crude was down 2.60% to $102.542 per barrel,

Gold was selling at $4182.11,

US natgas futures were down 2.94% to $3.0147 per gigajoule.

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

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