Australia’s S&P/ASX 200 (INDEXASX: XJO) price is expected to fall 0.5% at the open on Thursday according to ASX 200 futures prices in Sydney.
This follows the Commonwealth Bank of Australia (ASX: CBA) share price and Westpac Banking Corp (ASX: WBC) share price being rocked by higher rates.
Interest rates do a take-down on bank shares & ASX 200
The ASX 200 was weighed down on Wednesday by Australia’s largest banks, with broad-based heavy falls across all of the ASX bank shares following the RBA’s decision to increase rates 0.5% on Tuesday.
You can see why the ASX 200 ended lower:
- WBC share price – down 6.1%
- CBA share price – down 4.4%
- National Australia Bank (ASX: NAB) share price – down 4%
- ANZ Banking Group (ASX: ANZ) share price – down 2.3%
- Bendigo Bank (ASX: BEN) share price – down 7%
Energy shares get a green light
On the flipside, Wednesday’s positive performers were energy shares. Is it any wonder why?
This Tweet from property investor and economist Pete Wargent tells a story:
Electricity prices up more than 600pc in QLD
h/t @macrojustin
(Westpac Economics) #ausbiz pic.twitter.com/fmxhfcMFhA
— Pete Wargent (@PeteWargent) June 7, 2022
Here are the ASX’s best performers from Wednesday:
- Boral Ltd (ASX: BLD) – up 14.6%
- Paladin Energy Ltd (ASX: PDN) – up 13.5%
- Yancoal Ltd (ASX: YAL) – up 7.8%
- Woodside Group (ASX: WDS) – up 5.6%
- Santos Ltd (ASX: STO) – up 3.4%
Today is going to be an interesting day for ASX investors. Will lithium prices continue to weigh on more speculative plays? Will oil and gas stocks keep firing?
Here I was thinking that modestly increasing interest rates would actually be good for bank profit margins and dividends… I guess time will tell.
If you’re looking for a way to extract fully franked dividends and reduce volatility in your portfolio, I highly recommend you watch (or bookmark) the following interview with my friend and financial planner Drew Meredith, CFP.
Drew and I spoke about our top 5 ETFs for investing in Australian shares, including Vanguard Australia Shares ETF (ASX: VAS), VanEck’s Equal Weight ETF (ASX: MVW) and iShares S&P/ASX 200 Core ETF (ASX: IOZ).
