Australian Economy

ASX rises, NZ inflation hits 7.3 per cent, Suncorp share price jumps amid ANZ takeover bid

Australian shares have started the day higher, tracking gains on Wall Street.

The ASX 200 was up 35 points or 0.5 per cent to 6,641 at 10:19am AEST, with energy and industrial sectors leading the gains.

At the same time, the Australian dollar was flat at 68.06 US cents.

Whitehaven Coal firmed 7.6 per cent while BrianChip gained 5.2 per cent.

Suncorp jumped 5.2 per cent to $11.68 on the news that ANZ would buy the company for $4.9 billion to bolster its customer growth and home-loan book.

Shares of ANZ were halted.

Meanwhile, New Zealand government data shows the country’s annual inflation rose to 7.3 per cent from 6.9 per cent in the first quarter, which exceeded the expectations of many economists.

World stocks rally

Global equities climbed on Friday, while the dollar dipped and oil rose as investors reduced their expectations of an aggressive interest rate hike by the Federal Reserve this month and as US spending data beat forecasts.

Investors still face concerns that the world economy is headed for recession as central banks rush to get on top of galloping inflation, with steep interest rate rises seen this week in Canada, New Zealand, Chile, South Korea and the Philippines. Many are also still digesting an easing of Italy’s political crisis.

Fears of an economic downturn were fanned on Friday by Chinese data showing annualised 0.4 per cent growth in the second quarter, the worst since at least 1992, excluding early 2020 when the COVID-19 pandemic erupted.

The data reflect the colossal hit from widespread COVID-19 lockdowns. It sent Chinese shares 1.7 per cent lower and dragged an Asian ex-Japan index to two-year lows.

Investors elsewhere looked on the bright side.

“The market is due for a short-term snapback and, because we got better-than-expected results from Citigroup and retail sales, that gave fundamental reasons for investors to be optimistic,” Sam Stovall, chief investment strategist at CFRA, said.

The pan-European STOXX 600 index rose 1.8 per cent and MSCI’s gauge of stocks across the globe gained 1.5 per cent.

Wall Street’s main indexes traded higher as upbeat retail sales data allayed concerns about an economic slowdown, while shares of Citigroup surged after quarterly results were released.

Traders may be pressured overall, however, by companies’ second-quarter earnings, which so far have mostly underwhelmed.

The Dow Jones Industrial Average rose 1.9 per cent, while the S&P 500 gained 1.6 per cent, and the Nasdaq Composite added 1.4 per cent.

On the oil markets, Brent crude was down, trading at $US100.41 a barrel by 10:21am AEST.


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