Tin tức thì trường
03.04.2024, 01:24

ASX 200 plunges to near 7,790, in response to a downturn witnessed on Wall Street

  • ASX 200 Index loses ground as the real estate and information technology sectors weaken.
  • Wall Street declined as the US Treasury yields have risen after strong US economic data.
  • Resonance Health is positioned to finalize the acquisition of TrialsWest in an $8 million deal.

The ASX 200 Index continues its decline, nearing 7,790 and dropping by nearly 0.90% on Wednesday, following a downturn on Wall Street the previous day. The domestic equity market is weighed down by the real estate and information technology sectors, which are sensitive to interest rate changes. US Treasury yields have risen after strong US economic data, leading to speculation that the Federal Reserve (Fed) may be cautious in reducing borrowing costs.

According to Westpac's summary of the Reserve Bank of Australia (RBA) March meeting minutes, the current cash rate level is deemed appropriate for the time being, although conditions may evolve. The Board also indicates a balanced approach as the preferred model for future policy implementation.

The ASX 200 Index saw Regis Resources as the weakest performer, plunging by 5.21% to 1.91, followed by Credit Corp Group, down by 4.83% to 17.95, and Arcadium Lithium, which dropped by 3.94% to 4.14. In the meantime, the top gainers included Ramelius Resources, surging by 10.06% to 1.99, West African Resources, rising by 4.31% to 1.33, and Boss Energy, gaining by 3.43% to 5.12.

Boss Energy has reached a crucial technical milestone in its Honeymoon re-start strategy, clearing the path for the first drum of uranium to be filled within the next two weeks at the South Australian mine. The company has effectively filled the processing plant's ion exchange (IX) column with uranium-rich lixiviant sourced from the Honeymoon wellfields.

Resonance Health is positioned to finalize the acquisition of TrialsWest in an $8 million deal., thereby broadening its global clinical trial outreach. TrialsWest, renowned as one of Australia’s most seasoned clinical research centers, engages in collaborations with prominent pharmaceutical and biotechnology firms across the globe. Its mission revolves around facilitating the development of novel medicines and vaccines for the benefit of the global community.

 

Australian Stock Market FAQs

Stock markets in Australia are managed by the Australian Securities Exchange (ASX), headquartered in Sydney. The main indices are the S&P/ASX 200 and the S&P/ASX 300, which track the performance of the 200 and 300 largest stocks by market capitalization listed on the exchange, respectively. The S&P/ASX 200 was launched in April 2000, and it is rebalanced every quarter.

Almost half of the index belongs to the financial sector, with major banks like the Commonwealth Bank of Australia, Westpac or National Australia Bank. The so-called materials sector is also relevant – comprising almost 20% of the weighting in the index – with mining giants such as BHP Group or Rio Tinto. Other important sectors are biotechnology, real estate, consumer staples, and industrials.

Many different factors drive the ASX 200, but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual earnings reports the main factor behind its performance. Commodity prices can also affect the index given its significant share of mining companies. Macroeconomic data such as Gross Domestic Product (GDP) growth, inflation, or unemployment data from Australia is also important as they are indicators of the health of the country’s economy and thus the profitability of its largest companies. Global economic conditions may also play a role, particularly from China, as the Asian country is Australia’s largest trading partner.

The level of interest rates in Australia, set by the Reserve Bank of Australia (RBA), also influences the ASX 200 and ASX 300 indexes as it affects the cost of credit, on which many firms are heavily reliant. Generally, when the RBA cuts interest rates (or signals it is going to do it), it is positive for the Australian stock market as it means a lower cost of credit for companies and higher economic growth ahead, likely boosting sales. On the contrary, if the RBA signals that it will increase interest rates, this tends to weigh on the index. As always, there is a caveat: banks. Financial institutions tend to benefit from higher interest rates because they earn more from lending to other businesses, thus boosting their overall income.

 

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