The Match Out: Market finishes strong week on soft footing, Inflation drives sell off, IAG beats 1H

James Gerrish

Market Matters

The market gave up ground, though still managed to post a +97pt/1.36% gain for the week. A soft lead from the US driven by higher than expected inflation prints caused early weakness. Selling picked up throughout the morning thanks to a more aggressive tone from RBA Governor Lowe who said a rate rise this year was plausible, sending the market back below 7200 before some support kicked in. The ASX eventually closed 26pts off the intraday lows.

  • The ASX 200 finished down -71pts / -0.98% to close at 7217
  • Tech was the hardest hit given the inflationary fears. Real estate and healthcare also in the firing line given their exposure to rising rates.
  • Materials managed to post a gain against the weak broader market. Iron ore names were well supported.
  • Unibail-Rodamco-Westfield (URW), +6.46%, was strong today. They reported 1H results aftermarket yesterday and agreed to sell a 45% stake in a Paris centre in line with the previous valuation.
  • Insurance Australia Group (IAG), 4.18%, rallied on a beat at their first half result thanks to stronger than expected gross written premium (GWP) growth, also increasing GWP guidance to mid-single digit growth.
  • Despite a gain of more than 1% on the index this week only 4 sectors managed to close higher. The Financials were the standout on the back of broadly better than expected updates from the Big 4.
  • Travel stocks took out the top 3 gainers for the week following the news on international borders.
  • Gold is marginally lower in Asian trade at $1,824/oz
  • Asian markets are softer today as well. The Hang Seng down around -0.5%. The Nikkei was closed for the National Holiday in Japan
  • US Futures pointing to another weak night to finish the week. The S&P Futures are -0.8%, Nasdaq -2.33%.

ASX 200 Chart

Sectors this week

Source: Bloomberg

Stocks this week

Source: Bloomberg

Broker Moves

  • Mirvac Group Raised to Buy at Citi; PT A$3.13
  • Computershare Raised to Neutral at Citi; PT A$22.50
  • Bapcor Raised to Buy at Ord Minnett; PT A$8.60
  • Vulcan Steel Cut to Neutral at Credit Suisse; PT A$9.80

Major movers today

Have a great night

James, Harry & the Market Matters Team

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James Gerrish
Portfolio Manager
Market Matters

James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

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