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Our local market closed 0.6% lower yesterday, partly due to comments made by the RBA’s deputy governor, who stated that the official interest rate will move “a fair bit higher than where we currently are.” This put pressure on tech shares, which are interest rate sensitive. They declined 3%. And only two of the 11 industry sectors gained: energy was the best performer, up 2.5% and utilities gained 1%.
While Xero (ASX:XRO) and EML Payments (ASX:EML) declined with the broader tech sector, the top performers on the ASX200 were Lake Resources (ASX:LKE), Pendal Group (ASX:PDL) and Whitehaven Coal (ASX:WHC).
WHC was also the most traded stock by Bell Direct clients. Its share price closed 5.5% higher, following its Q4 update where the company reported that it expects to deliver an EBITDA worth $3 billion for the 2022 financial year. And WHC reported a strong quarter off the back of record coal prices. A number of brokers yesterday released positive reports on the coal miner as well. Bell Potter rate WHC a Buy. Citi upgraded WHC from Neutral to Buy. Morgans have an Add rating and Macquarie and Credit Suisse have an Outperform rating. So, brokers are optimistic on WHC at the moment. Its current share price is $6.21, and broker price targets range from $6.70 by Morgans, to $7.85 by Citi.
Overseas, European stocks rallied with earnings season kicking off, and positive momentum from Wall Street. The STOXX 600 index closed with a gain of 1.4%, and this week investors will be waiting for the European Central Bank’s policy meeting on Thursday in Frankfurt, as policymakers have given advance notice of the first-rate hike in 11 years.
US equities saw a strong session overnight. The Dow Jones gained more than 750 points, up 2.4%, the S&P500 gained 2.8% and the tech-heavy Nasdaq closed with a 3.1% gain. This is off the back of strong corporate earnings reports coming in, bringing all three major averages above their 50-day moving averages for the first time since April.
What to watch today:
Trading Central have identified a bearish signal in ResMed (ASX:RMD), indicating that the stock price may fall from the close of $31.65 to the range of $26.75 to $27.75 over 22 days, according to the standard principles of technical analysis.