The S&P/ASX 200 (ASX: XJO) delivered another negative day on Wednesday, falling 0.6% as concerns of ‘peak growth’ and stagflation continue to grow. Every sector barring technology and energy were lower, with the latter so far the standout story of the second half of 2021.
Whitehaven Coal Ltd (ASX: WHC) continues to benefit from booming coal prices, up 3.2%, whilst the likes of Afterpay Ltd (ASX: APT) and Virgin Money (ASX: VUK) both rallied by around 3%.
RBNZ hikes interest rates
Bond rates fell once again, but markets remain fixated on the short-term noise. It was a big day for monetary policy, with the Reserve Bank of New Zealand joining Norway among the first central banks to hike interest rates.
The base rate was moved from 0.25% to 0.5% and may well offer a canary in the coal mine for Australia’s economic recovery.
APRA takes action
The bigger news was APRA’s decision to write to the major banks ordering them to increase the buffer on their home loan serviceability calculations by 0.5% to 3%. The result is the ‘affordability’ calculation will result in lower maximum loan values for new borrowers.
Whilst APRA’s decision was a negative, sending Commonwealth Bank (ASX: CBA) down 2.3%, it didn’t go as far as limiting the debt-to-income ratio that many had predicted.
A2 Milk share price tumbles on class action
Shares in A2 Milk Company Ltd (ASX: A2M) fell by 7% after Slater and Gordon Limited (ASX: SGH) announced it was pursuing a class action against the firm based on poor disclosures around their multiple earnings downgrades in recent years. Management will defend the class action.
Magellan FUM falls
Magellan Financial Group Ltd (ASX: MFG) released its quarterly funds update, reporting a $4 billion fall in assets under management, which remains firmly above $100 billion.
The majority of redemptions came from a number of large institutional investors rebalancing along with the recent restructure of Magellan’s High Conviction Trust into a listed ETF. The fund is in the process of cannibalising its core business in an effort to convert investors into lower cost, more consistent earning ETF structures.
ASX travel rebound halted
Meanwhile, the ASX travel sector reversed recent gains on the worsening Victorian outbreak with Flight Centre Travel Group Ltd (ASX: FLT) falling 5.7% and Webjet Limited (ASX: WEB) down 6.2%.
ASX 200 today
The ASX 200 is tipped to climb when the market opens on Thursday after all three US benchmarks finished higher overnight. For all the latest, check out my US stock market report.
