From gloom, to boom all in the space of a few minutes from 11.30 am Wednesday as the details of the June quarter Consumer price Index and its monthly indicator for June made fools of gloomy business economists and media ‘experts’ by coming in a touch better than forecast.
So instead of the ‘biggest test’ for the Reserve Bank in a generation as one business writer put it, blindly applying an eggbeater to a preview story, we had ‘ ’no rate rise next week’ and the ASX 200 surging 1.75% on the day to end at a new all time high.
That left the index up 4.4% – outperforming the S&P 500 and its fleet of megatechs which will struggle to end the month with a gain (it was down 0.7% with a day to go at Tuesday’s close in New York).
The ASX ended July at a new high of 8,092.30 at the close in a confident end to what had looked like a tough month until the banks regained their poise.
Just as they saved the local market in 2023-24, the big banks started the new financial year in the same style, pushing the AS X to outperformance globally
And for all the reasons advanced by our fleet of experts about why the ASX 200 has outperformed Wall Street for the month – look no furrther than the mainstays of our market, the big four banks, led by the Commonwealth, closing July at another record of $137.323 (after touching an all time high in trading of $137.53).
Wednesday’s gain was just 1%, but 8.8% for July as its market value surged to a new high of nearly $230 billion at yesterday’s close.
It went past and stayed ahead of BHP, the traditional market leader, which saw its shares rise 1.3% on Wednesday after Rio’s interim result was deemed by the market to be OK but not outstanding.
BHP shares lost 2.8% over July as its market value slipped to $213.5 billion.
NAB had a big month – its shares added 6.6% and its value surged to nearly $119 billion, while Westpac shares were up 9.1% and its market value topped the $100 billion for the first time at nearly $103 billion.
ANZ brought up the rear with its shares adding 1.8% over the month to end at a value of $87.1 billion as it remains on a watchlist over its problems with a government bond issue last year and not being able to reconcile its participations in bond issues over time and then giving the government an accurate figure.
And the 5th bank – Macquarie, saw its value rise to just over $80 billion as the shares gained 3.15 for the month despite a weakish update at its latest AGM. It’s only 10% behind ANZ.
Pharma group, CSL has a quietly solid month, adding 6% with the market value rising to just on $150 million.
Rio Tinto’s interim and steady dividend actually had a bigger impact – despite iron ore prices falling under $US100 a tonne on Tuesday (it regained the $US100 level on Wednesday).
Rio shares were off 3.1% in July as its market value eased to just over $169 billion and shares in Fortescue recovered part of Tuesday’s 10% plus loss with a gain of 3.2% on the day.
That however still left the shares down more than 13% and its market value down to just over $58 billion.