ASX closes with 7,682 points on Thursday, as RBA buckles down on rates decision

The Reserve Bank of Australia’s ongoing commitment to raise rates if it deems it necessary in the future continues to influence Aussie investors.

The Aussie markets slipped again as the Reserve Bank of Australia renewed its commitment to raise rates if it deems it necessary in the future.

The S & P/ASX200 fell 17.80 points, or 0.23 per cent, to finish on 7,682.

The All Ordinaries also closed lower on Thursday, dropping 26.60 points or 0.34 per cent, to 7,886.5.

The ASX saw red at the close on Thursday. Picture: NewsWire /Gaye Gerard

Five of 11 sectors were in the red at the close, as real estate fell the hardest at 2 per cent.

Materials was closely behind, losing 1.8 per cent as iron-ore miners weighed.

Energy stocks also lost ground whilst banks saw the highest gains of the day, with AMP gaining 13.27 per cent.

The worst performing stock was West African Resources Ltd, down 10.75 per cent.

But the biggest news of the day comes as Qantas stock price fell 2.18 per cent, closing at $5.84 a share.

It comes as the airline announced on Thursday it would slash the bonuses of former chief executive Alan Joyce by more than $9m.

The decision comes as the carrier has committed to implementing all 23 recommendations made in its review of key governance matters and was revealed in an update on 2023 financial year executive remuneration.

The carrier will also pay $100m penalty ordered by the Australian Competition and Consumer Commission, after it admitted to “misleading customers in relation to flight cancellations processes”.

Qantas also agreed to a $20m customer remediation program.

Former Qantas Group Chief Executive Officer Alan Joyce will have his bonus slashed. Picture: NewsWire / Christian Gilles

Meanwhile, IG market analyst Tony Sycamore said the “jittery session on Wall Street” seen earlier this week continues impact Aussie markets.

“The rejection from last week’s 8148 high left a weekly “loss of momentum” candle, like the one that warned of the recent pullback on Wall Street,” he said.

“Additionally, it occurred from the top of a weekly trend channel, which has contained the market for the better part of 22 months.

“There remains a lack of solid evidence to support the idea that the ASX200 or US equity indices have based.

“However, we note that the ASX200 has a critical layer of support in the 7600/7500 area, including the 200-day moving average at 7581 and the April 7492 low.

“ This provides a good level for investors to lean against if looking to add to longs, leaving room to add towards the lower bound of the weekly trend channel at 7000.”

Meanwhile, the markets were also continued to be influenced by this week’s RBA decision to hold the official cash rate at 4.35 per cent, giving some reprieve to mortgage holders.

However, RBA Governor Michelle Bullock said the board did not expect inflation to return to the 2-3 per cent target band until December 2025.

“On balance, the board decided to keep interest rates on hold, judging that such an outcome would still meet the board’s mandate to balance its inflation and employment objectives,” Ms Bullock said in a speech on Thursday.

“But the board remains vigilant with respect to upside risks on inflation and will not hesitate to raise rates if it needs to.

“I know this is not what people want to hear, but the alternative of persistently high inflation is worse. It hurts everyone.”

The ASX fell on Thursday. Picture: NewsWire / John Appleyard

Mr Sycamore said the RBA’s “hawkish messaging” will take time to reflect on investors’ motivations.

“Despite the RBA’s hawkish messaging, the local rates market is far from convinced that the RBA will follow through on its jawboning, with a 25 basis point rate cut almost fully priced before year-end,” Mr Sycamore said.

“Nonetheless, the RBA’s hawkish bias does disadvantage the local stock market compared to its global counterparts, where central banks are either poised to ease or have already begun cutting rates.”

It comes as the real estate sector also fared poorly at the close on Thursday, with Mirvac Group down the bottom of the sector with a 9 per cent loss.