ASX Large Caps: Big drop in CPI boosts rates-sensitive stocks; gold stocks also rally as bullion nears all-time high

Local shares closed higher again on Wednesday
Aussie headline CPI unexpected fell to 4.9pc
Interest rates sensitive sectors rose following CPI report

The ASX200 closed +0.25% higher on Wednesday, boosted by interest rates-sensitive stocks following the latest CPI report.

According to the ABS, Australia’s CPI has unexpectedly fallen to 4.9% in October, from 5.6% in September – mainly due to falling demand as a result of price pressures.

The basket of goods shows that electricity prices rose 3.4% in the month of October, while rent prices fell 0.4% for the same period.

The headline 4.9% figure fell below economists’ expectations of 5.2%, which cements the market’s consensus that the RBA will pause in the December meeting.

“While this was good news, given most analysts estimated the CPI figure to be 5.2%, inflation still remains uncomfortably high due to a substantial increase in rental CPI over 2023, widely linked to record-high migration rates,” said Farhan Badami, market analyst at eToro.

“So despite the RBA’s hawkish stance, the possibility of another rate hike seems unlikely in the first quarter of 2024, given the current trend indicated by key indicators such as CPI,” he added.

Meanwhile over the pond, the RBNZ held its interest rates steady at 5.5% today, as expected.

On the ASX, rates sensitive sectors like Tech, Real Estate and Discretionary rose, while Energy was the worst performing sector.

Energy stocks fell despite crude prices advancing overnight ahead of the high-stakes OPEC+ meeting on November 30.

Gold stocks also rallied after bullion prices gained further in Asian hours, trading now at US$2,045 an ounce – boosting hopes that it could top the all-time high of US$2,074.88 reached in August 2020.

BIG CAP WINNERS

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Code Name Price % Change Volume Market Cap FPH Fisher & Paykel H. 22.15 7.63 943,853 $11,981,065,741 BGL Bellevue Gold Ltd 1.69 5.64 4,193,484 $1,832,663,878 NEM Newmont Corporation 60.45 5.52 1,235,399 $19,581,298,684 EMR Emerald Res NL 2.75 5.36 1,417,427 $1,625,445,545 PRU Perseus Mining Ltd 1.90 5.12 5,116,731 $2,479,282,941 IEL Idp Education Ltd 22.92 4.80 957,486 $6,087,212,935 EBO Ebos Group Ltd 34.35 4.73 30,977 $6,291,440,849 KLS Kelsian Group Ltd 6.78 4.55 422,817 $1,745,443,346 EVN Evolution Mining Ltd 4.02 4.15 6,312,305 $7,092,165,731 SQ2 Block 95.16 3.98 125,961 $3,091,721,044 GOZ Growthpoint Property 2.36 3.96 400,788 $1,711,243,618 SGR The Star Ent Grp 0.53 3.96 6,184,364 $1,448,683,843 MAD Mader Group Limited 6.74 3.94 78,507 $1,296,000,000 GOR Gold Road Res Ltd 1.92 3.92 3,613,008 $1,997,302,028 HVN Harvey Norman 3.75 3.74 2,449,633 $4,498,084,021 CMW Cromwell Prop 0.43 3.61 2,909,928 $1,086,829,680 CNI Centuria Capital 1.46 3.56 479,619 $1,131,127,184

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Fisher & Paykel Healthcare (ASX:FPH) rose 7% after releasing the results for H1 FY24.

For the six months ended September 30, total operating revenue was $803.7 million, a 16% increase from the pcp. NPAT for the first half was $107.3 million, a 12% increase from the pcp.

“Our first half result indicates a continuation of stable ordering patterns in our Hospital business, and a robust performance for Homecare,” said CEO, Lewis Gradon.

In the Hospital product group, which includes humidification products used in respiratory, acute and surgical care, revenue for the first half was $487.5 million. This marks an increase of 11% on the pcp.

Looking ahead, the company expects operating revenue for the 2024 financial year to be approximately $1.7 billion, and net profit after tax to be in the range of approximately $250 million to $260 million.

BIG CAP LOSERS

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Code Name Price % Change Volume Market Cap WC8 Wildcat Resources 0.77 -8.33 20,847,650 $1,003,718,486 BOE Boss Energy Ltd 4.20 -5.09 1,395,317 $1,559,966,353 GNC GrainCorp Limited 7.49 -4.95 480,423 $1,767,775,536 MEZ Meridian Energy 4.74 -4.44 50,978 $6,280,310,182 QBE QBE Insurance Group 15.18 -3.04 1,897,295 $23,379,774,602 MCY Mercury NZ Limited 5.64 -2.42 10,987 $8,041,293,441 IAG Insurance Australia 5.78 -2.12 2,983,539 $14,304,975,237 YAL Yancoal Aust Ltd 4.87 -2.11 1,266,305 $6,562,584,002 PDN Paladin Energy Ltd 1.01 -1.95 5,008,232 $3,057,959,921 ABB Aussie Broadband 3.74 -1.71 608,847 $1,037,446,273 KAR Karoon Energy Ltd 2.05 -1.68 3,144,134 $1,571,039,113 AZJ Aurizon Holdings Ltd 3.55 -1.66 5,609,689 $6,644,941,375 AGL AGL Energy Limited. 9.64 -1.63 471,046 $6,592,922,883

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Wildcat Resources (ASX:WC8) fell 8% despite reporting that recent drilling has added a further 160m strike length to the Leia Pegmatite at Tabba Tabba. Leia is now more than 2km long, thickening with depth (up to 180m true width), and remains open along strike and at depth.

New assay results from Leia include: o 73m at 1.1% Li2O from 266m, and 45m at 1.1% Li2O from 24m. Assay results from the first diamond drill holes are expected in the coming weeks.

Coal stock Stanmore Resources (ASX:SMR) fell after announcing that the Board have today resolved to pay a special, fully franked dividend to shareholders of US 5.82 cents per share. This dividend is equal to the amount which would have been declared if applied to Stanmore’s 2022 results.

In the context of this announcement, Stanmore has also provided an update of its YTD performance to October, reaffirmed guidance for 2023, and provided an initial guidance for 2024.

As at 31 October, YTD saleable production has reached 11.0Mt, YTD FOB cash costs were US$91 per tonne, YTD Underlying EBITDA was US$949m, and Net Cash was US$181m.

For 2024, Stanmore sees guidance of saleable production consistent with the 2023 range, between 12.3Mt to 13.0Mt.

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