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Yesterday, the market closed 0.4% lower. Shares rose higher after the US Fed announced it would wind down its asset purchases, known as tapering, at a faster pace amid a continued rise in inflation, and signalled an interest rate rise next year.
Information technology gained the most, while healthcare fell 5%. The local market was dragged into the red by heavy losses from CSL, which lost over 8% yesterday. Champion Iron (ASX:CIA) was another of the worst performers. On Wednesday, Macquarie maintained their Outperform rating on CIA, with a $7.40 price target. The broker is generally positive on stocks with iron ore exposure.
Mesoblast (ASX:MSB) jumped 11%, off the back of a clinical trial update, where they’re working on regenerative medicines for inflammatory conditions. WiseTech (ASX:WTC) jumped over 6% to $59.10 a share, after hitting a new all-time high at $59.25 in intraday trading.
The most traded stocks by Bell Direct clients yesterday, were CSL (ASX:CSL) and Fortescue Metals (ASX:FMG), which yesterday revealed its looking to repurpose its New Zealand oil refinery. Morgan Stanley retain their Underweight rating on FMG with a $14.05 target price. And Macquarie retain their Outperform rating and a $21 target. FMG is also a Bell Potter BUY at $19.75 target.
And Woolworths (ASX:WOW) has come under some selling pressure this week, after a trading update: its bottom line took an $150 million hit. Analysts were expecting its pace of growth in grocery sales to ease off once restrictions were lifted but were caught out by the extent of COVID-19 ramifications. Woolworths staff were required to be tested every three days for Delta, then had to wait a few days for results. This interrupted the efficiency and productivity of the supermarket’s labour-intensive operations. The pandemic also caused supply shortages and delays, which led to a sharp increase in wholesale grocery prices. Most brokers have updated their recommendations on Woolworths and lowered their price targets this week. UBS retain their SELL rating, while Macquarie and Citi are Neutral.
European stocks closed higher as investors took in central bank decisions. The Bank of England yesterday hiked interest rates for the first time since the beginning of the pandemic. Meanwhile the European Central Bank further cut its bond purchases, promising to continue its monetary policy support for the euro zone into next year. And the US Fed announced several rate hikes. In New York, equities were lower, as some of the large tech names struggled, which saw the Nasdaq drop 2.5%. The Dow also down 0.08% and the S&P500 down 0.9%.
Looking to the local session ahead, despite the sell-off in tech in New York, the local market is set to open higher. The SPI futures are suggesting a 0.14% rise at the open, which is supported by a broad rally in commodities.
What to watch today: