by Peter Milios
Following the release of stronger than anticipated GDP figures from China on Tuesday, the heavyweight materials sector has counterbalanced declines in almost all sectors in the ASX.
Currently, Materials is trading 1.27 per cent higher, whilst IT and Consumer Staples are up marginally at 0.18 per cent and 0.03 per cent respectively.
Atlanta Federal Reserve President Raphael Bostic told CNBC that he sees one more rate hike of 25 basis points, before pausing to see its impact on the economy. This would take the US Federal Funds rate to 5 per cent to 5.25 per cent. Bostic’s words come as St Louis Federal Reserve President James Bullard told Reuters that he favours a higher terminal rate of between 5.50 per cent and 5.75 per cent.
BlackRock strategists are advising investors to move away from traditional 60/40 portfolios and instead consider public and private investments, as well as tactical holdings of bonds, to navigate higher interest rates. They suggest breaking up asset allocation buckets and looking at specific equity sectors, such as energy or healthcare, to select companies with robust cash flows and resilient supply chains that can endure a recession. The strategists warn that the old assumptions of persistent gains from the 60/40 portfolio mix do not reflect the new regime of major central banks hiking interest rates into a recession to bring down inflation.
Overall, at noon, the S&P/ASX 200 is 0.04 per cent higher at 7,363.50.
The SPI futures are pointing to a rise of 13 points.
Best and worst performers
The best-performing sector is Materials, up 1.27 per cent. The worst-performing sector is Industrials, down 0.87 per cent.
The best-performing large cap is Pilbara Minerals (ASX:PLS), trading 4.42 per cent higher at $4.135. It is followed by shares in Mineral Resources (ASX:MIN) and IGO (ASX:IGO).
The worst-performing large cap is NEXTDC (ASX:NXT), trading 2.24 per cent lower at $11.81. It is followed by shares in James Hardie Industries plc (ASX:JHX) and Aristocrat Leisure (ASX:ALL).
Asian markets
Asia-Pacific markets traded mixed on Wednesday as Wall Street’s earnings season continued and US Federal Reserve officials delivered mixed signals on future rate hikes.
Japan’s Nikkei 225 dipped 0.43 per cent and the Topix fell 0.37 per cent. South Korea’s Kospi rose 0.16 per cent, while the Kosdaq was also up 0.38 per cent.
Mainland Chinese markets were all lower, with the Shanghai Composite 0.14 per cent lower and the Shenzhen Component shedding 0.35 per cent. Hong Kong’s Hang Seng index was 0.37 per cent lower, and the Hang Seng Tech index lost 0.61 per cent.
Company news
Buxton Resources (ASX:BUX) has announced that their RC drill program has returned numerous zones of thick and high-grade graphite mineralisation at its Graphite Bull Project in WA. Baseline biological surveys to support environmental assessments and approvals have now commenced. Shares are trading 23.5 per cent higher at 21 cents.
Rumble Resources (ASX:RTR) has reported their Mineral Resource Estimate for their zinc, gold and lead Earaheedy Project in WA, confirming the project as potential for world class. In response, Managing Director Shane Sikora commented: “This exceptional resource estimate is a major milestone for Rumble, confirming the Earaheedy Project as one of the largest zinc sulphide discoveries globally over the last decade.” Shares are trading 13.2 per cent higher at 21.5 cents.
Blue Star Helium (ASX:BNL) has announced that the final approval was received to drill the first two helium development wells at the highgrade Voyager helium development in Colorado. Drilling of the first well is expected to commence in late Q2 or Q3. Shares are trading 3.23 per cent higher at 3.2 cents.
Commodities and the dollar
Gold is trading at US$1782.70 an ounce.
Iron ore futures are pointing to a 0.44 per cent rise.
One Australian dollar is buying 67.22 US cents.
