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Inflation figures for April exceeds expectations: ASX 1.09% lower at noon

The monthly inflation data for April has exceeded expectations, primarily due to the increased cost of petrol. According to the Australian Bureau of Statistics, the Consumer Price Index (CPI) rose by 6.8 per cent in the year leading up to April 2023, compared to 6.3 per cent in March. This figure is higher than the anticipated 6.4 per cent projected by the markets. As a result, this development strengthens the case for a potential interest rate hike during the upcoming meeting of the Reserve Bank of Australia (RBA) on Tuesday.

At noon, the S&P/ASX 200 is 1.09 per cent lower at 7,130.60.

The SPI futures are pointing to a fall of 75 points.

Best and worst performers

The best-performing sector is Information Technology, up 0.42 per cent. The worst-performing sector is Energy, down 2.36 per cent.

The best-performing large cap is Mercury NZ (ASX:MCY), trading 1.91 per cent higher at $5.88. It is followed by shares in Qantas Airways (ASX:QAN) and Altium (ASX:ALU).

The worst-performing large cap is Whitehaven Coal (ASX:WHC), trading 4.79 per cent lower at $5.76. It is followed by shares in Yancoal Australia (ASX:YAL) and Wesfarmers (ASX:WES).

Asian news

Asia-Pacific markets were mixed as Wall Street considered the likelihood of Congress passing a tentative deal on raising the U.S. debt ceiling amid growing opposition within the GOP.

Asia will also see a slew of economic data out on Wednesday, including China’s May manufacturing activity figures. Australia will publish its seasonally adjusted April inflation figures, and a rate decision from Thailand’s central bank, among others.

In Japan, the Nikkei 225 retreated from its 33-year high and slid 1.03 per cent in early trade, while the Topix saw a smaller loss of 0.96 per cent.

Economists polled by Reuters expect the country’s weighted inflation rate in April to slow slightly to 6.4 per cent.

South Korea’s Kospi bucked the trend and gained 0.16 per cent, and the Kosdaq advanced 0.13 per cent.

Hong Kong’s Hang Seng index is set to fall further despite a late rally in Tuesday session, with futures at 18,260 compared to the HSI’s close of 18,595.78.

Company news

TerraCom (ASX:TER) announces a fully franked dividend of 3.0 cents per fully paid ordinary share. In response, MD Danny McCarthy, said: “Following payment of this dividend in June 2023, the Company will have returned $244 million to shareholders since July 2022.” Shares are trading 5.83 per cent lower at 48.5 cents.

Wildcat Resources (ASX:WC8) announced that field work is underway at their Tabba Tabba project in WA. Wildcat’s maiden drill program which will commence in early July. Shares are trading 22.7 per cent higher at 13.5 cents.

Vertically integrated anode materials business, EcoGraf (ASX:EGR; FSE:FMK; OTCQX:ECGFF) has signed a non-binding Cooperation Agreement with POSCO International, a global leading manufacturer of natural graphite anodes. Shares are trading 8.33 per cent higher at 16.3 cents.

Commodities and the dollar

Gold is trading at US$1974.70 an ounce.
Iron ore is 1.7 per cent lower at US$102.65 a tonne.
Iron ore futures are pointing to a 1.6 per cent fall.
One Australian dollar is buying 65.04 US cents.