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Over in the US on Tuesday, Wall Street closed mixed after a volatile session as rising bond yields and corporate earnings results weigh on investor sentiment. The S&P500 closed just 0.01% lower after trading down all session, while the tech-heavy Nasdaq lost 0.25% and the Dow Jones rose just 0.04%. The 10-year US Treasury yield topped 4.8% following US retail sales data coming in at a rise of 0.8% which was higher than expected, indicating consumers are still spending in the high interest rate environment. The Bank of America shares rose 2.4% on Tuesday after posting better-than-expected results while Nvidia fell 4.7% after the US Department of Commerce said it plans to ban the export of more AI chips to China.
In Europe on Tuesday, markets closed mostly flat following the release of hotter-than-expected US retail sales data which reignited fears of further monetary tightening out of the world’s largest economy and subsequent flow-on impacts into the European region. The STOXX600 fell 0.1%, Germany’s DAX rose just 0.09%, the French CAC added 0.11% and, in the UK, the FTSE100 climbed 0.58%.
A morning rally locally was dampened in afternoon trade leading to the ASX200 close Tuesday’s session up 0.42% led by a rebound in technology stocks which started the week in negative territory. Healthcare stocks took the biggest hit yesterday with the sector closing down 0.8% while consumer staples and consumer discretionary stocks also closed the day in the red. The tech-rally was driven by strength on the Nasdaq in the US overnight.
The release of the RBA’s latest minutes sparked the sell-off in afternoon trade that saw the strong gains on the local index ease as investors took the minutes as more hawkish than previous months. The consensus of the minutes was focused on the RBA having considered raising the cash rate by 25-basis points at the last meeting before ultimately deciding to leave the rate at 4.1% for a fourth consecutive month.
Health tech company Cochlear fell 0.6% on Tuesday after the company released an update outlining that its full-year profit guidance previously issued didn’t account for the planned $170m acquisition of Oticon Medical, Cochlear’s implant business. The healthcare sector has come under pressure in 2023 as company growth outlook slows post COVID and marginal pressures hurt companies that are wearing the rising costs as opposed to passing costs onto customers.
While Bapcor fell over 12% after the auto parts retailer posted a trading update outlining first quarter performance is below expectations due to slowing sales growth and current margin pressures faced in the high interest rate, rising cost environment.
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