Skip to content

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

ASX 200 afternoon report: 7 November 2023

Your ASX 200 afternoon report.

Source: Bloomberg

ASX 200 rebounds on dovish RBA rate hike

At its board meeting today, the Reserve Bank of Australia (RBA) raised its official cash rate by 25bp to 4.35%, its first rate rise since June.

While the upside surprise in Q3 inflation data meant market commentators were widely expecting today's move, markets were less certain, with the interest rate market assigning a 58% chance of a rate hike.

The discrepancy between commentators and the rates market reflected the uncertainty created by recent discussions in political circles as to whether the Q3 upside inflation surprise represented a material change to the RBA's inflation outlook.

Credit to new RBA governor Michele Bullock, who looked through the unpleasantries and political noise to ensure the RBA remained committed to its objective of ensuring inflation returns to target. The RBA retained its tightening bias. However, it was watered down from:

"Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve."

To

"Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks. "

The change in language suggest that the incoming data will need to be red hot for the RBA to act on its tightening bias, including

- Q3 wages data (Wednesday, 15 of November 2023, AEDT)
- October labour force report (Thursday, 16 of November 2023, AEDT)
- October retail sales (Tuesday, 28 of November 2023, AEDT)
- October monthly CPI indicator (Wednesday, 29 of November 2023, AEDT)

Ahead of this afternoon's announcement, the ASX200 was trading 30 points lower at .6967. Following the RBA's dovish rate hike, it has partially recovered to be trading 14 points lower at 6984 at 3.40 pm.

Today’s market movements

IT sector

The best-performing sector has been the IT sector, led by

  • ZIP +2.67% to $0.39c
  • Wisetech +1.58% to $61.58
  • Tyro Payments +1.28% to $0.99c
  • Xero +1.20% to $113.16.

Consumer discretionary stocks

Consumer discretionary stocks have gained as the prospect of future rate hikes diminishes.

  • Nick Scali: +1.51% to $11.41
  • Domino's Pizza: +1.52% to $53.50
  • Super Retail Group: + 0.83% to $13.43

Banking sector

The big banks have fallen as the market ponders the probability of lenders passing on the RBA's full 25bp rate hike to mortgage holders, and as some of the gloss comes off Westpac's trading update.

  • Westpac: - 2.42% to $21.39
  • Macquarie: -1.40% to $159.39
  • NAB: -1.07% to $29.03
  • ANZ: -1.05% to $25.47
  • CBA: - 0.35% to $100.70

Resources sector

A larger-than-expected fall in China's trade surplus to $56.53 bn in October from $77.71bn in September was unable to prevent gains for the iron ore giants.

  • Rio Tinto: + 0.51% to $122.13
  • Fortescue: + 0.39% to $123.33
  • BHP: + 0.39% to $45.61

ASX 200 technical analysis

Last week's close above 6950 negated the technical damage following October's sell-off. If the ASX 200 can close above 7000, it will provide a platform for the ASX 200 to test the 200-day moving average at 7200, with scope to range highs at 7400.


ASX 200 daily chart


Source: TradingView
  • Source Tradingview. The figures stated are as of 7 November 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.