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Wall Street wavered during the midweek session before closing mixed as investors fears of a banking crisis rise on the back of First Republic Bank’s first quarter results and subsequent 49% decline on Tuesday. Upbeat earnings out of Alphabet, Microsoft and Boeing softened the sharp losses but weren’t enough to turn Wall Street positive at the closing bell on Wednesday. At the closing bell, the Dow Jones fell 0.68%, and the S&P500 lost 0.38%, but the tech-heavy Nasdaq added almost half a percent buoyed by strong earnings results.
Over in Europe, markets closed lower as investor fears of a banking crisis worsened. London-listed bank Standard Chartered posted a 21% rise in pre-tax profit which beat estimates and helped restore some relief in the European banking sector. Germany’s DAX ended the midweek session down 0.48%, the French CAC dropped 0.86%, and in the UK, the FTSE100 fell 0.49%.
The local market rallied after midday yesterday following the release of Australia’s inflation data for Q1, showing inflation cooling to 7% over the twelve months to the March quarter, in a sign inflation has peaked down under. Quarter-on-quarter, inflation rose 1.4%, with the highest price rises from Medical and hospital services, up 4.2%, tertiary education, up 9.7%, and gas and other household fuels, up 14.3%. The rise to 7% for the March quarter was slightly above consensus expectations of a rise to 6.9% but does show inflation is beginning to cool.
The rise in medical and hospital services is to be expected in the March quarter as this is generally the period GPs and other health service providers review their fees, and the Medicare Safety Net is reset at the start of every calendar year. Tertiary education fees are also indexed at the start of the year. The significant rise in gas and other fuel costs reflects major events over the past year globally including Russia’s war with Ukraine and unplanned outages at coal fired power stations according to the ABS. At the closing bell of the midweek session though, a sharp sell-off in Utilities stocks weighed the local bourse down to close 0.08% lower.
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