ASX 200 gives up gains, AUD lifts on inflation data; Goyder survives as Woodside chair; Star ex-CEO Robbie Cooke before Bell inquiry

Richard Goyder survives as Woodside chair but investors reject climate plan. Westpac, AMP, Citi and UBS push back rate cut timing after CPI data. Kogan dives. Star ex-CEO felt 'under attack' from NICC. 

Investors are parsing economic and earnings updates this week. Picture: Chris Pavlich

Welcome to the Trading Day blog for Wednesday, April 24. The ASX 200 index gave up its gains following the CPI data to close flat, ending just half a point in the red at 7683.00 points.

The Aussie dollar rose after the inflation data and is trading around US65.14c.

Updates

4:46 pm April 24, 2024

ASX gives up gains to end flat

Megan Neil

The ASX 200 has finished flat, giving up its early gains after stronger-than-expected inflation data pushed back expectations for the timing of RBA rate cuts.

After rising as much as 0.5 per cent in morning trading, the ASX 200 ended just half a point in the red at 7683.00 points.

Bell Potter director of institutional sales and trading Richard Coppleson said the hot inflation data caused around a 40 point drop in the market, while the Aussie dollar rallied, in part due to a lowering of tensions in the Middle East.

"The market did not like the inflation print, as it came in higher than economists had been predicting with first quarter CPI coming in at up 1 per cent versus the market at 0.8 per cent, and well up from 0.6 per cent in the fourth quarter. While the 12-month number was down to 3.6 per cent from 4.1 per cent previously," Mr Coppleson said.

"…It looks like we'll get no rate cuts in 2024," he added.

The heavyweight banking sector provided support for the bourse, with Westpac up 0.9 per cent, CBA lifting 0.4 per cent and NAB up 0.5 per cent.

Property group Goodman's 1.7 per cent rise also boosted the ASX 200, but BHP's 0.6 per cent decline weighed on the index, as did Cleanaway's 10 per cent fall after it dismissed talk of a takeover by Boral buyer Seven Group.

Fortescue ended up 0.7 per cent after its quarterly update, while Mineral Resources gained 0.4 per cent.

Star Entertainment lost 3.6 per cent as its former chief executive fronted the Bell inquiry, while online retailer Kogan tumbled more than 27 per cent on its weaker-than-expected quarterly sales.

4:35 pm April 24, 2024

Santos can chase activist groups over costs

Angelica Snowden

Santos will be allowed to pursue the Environmental Defenders Office and its possible links with four activist groups as it tries to recover costs relating to a failed campaign to stop development of its massive Barossa pipeline.

Federal Court judge Natalie Charlesworth rejected the EDO's case in January that the 262km gas pipeline would cause irreparable damage to First Nations people and their lands in the Tiwi Islands.

On Wednesday Justice Charlesworth ordered subpoenas could be issued to four activist groups including The Sunrise Project Australia, Jubilee Australia Research Project, Environmental Centre NT and Market Forces as Santos tries to work out where it can recover millions of dollars of extra costs.

4:15 pm April 24, 2024 Highlight

Woodside investors reject climate plan

Paul Garvey

Woodside chairman Richard Goyder says the company will continue to engage with its shareholders on its emissions ambitions after the company’s climate transition action plan was rejected by shareholders.

A resolution to adopt the plan was rejected by a majority of shareholders at the company’s annual general meeting in Perth on Wednesday. Only 41.6 per cent of shares voted went in favour of the plan, with 58.4 per cent voting against.

The plan had drawn criticism in the lead-up to the meeting by proxy adviser Glass Lewis as well as several investment funds and climate activist groups.

Mr Goyder told the meeting that while the vote on the resolution was non-binding, the company would take the shareholder feedback seriously.

“We will reflect on the voting, continue to engage with shareholders, understand the feedback, and decide how we hopefully work with shareholders who want to own share in Woodside to ensure that they have the confidence in us and our plans,” he said.

The vote followed protests both outside and within the meeting by climate activists. Dozens of police watched as hundreds of protesters demonstrated on the main road into the Crown complex, while a flash mob of protesters disrupted the meeting as Mr Goyder discussed the company’s remuneration report.

3:44 pm April 24, 2024

Markets price out bets of 2024 rate cut

Megan Neil

Financial markets are now pricing out almost any bet of a rate cut this year after the stronger-than-expected inflation data, CommSec says.

CommSec senior economist Ryan Felsman notes the Aussie dollar lifted in reaction to the data, the ASX 200 pared back its gains and pivotal three-year bond yields rose by 17 points to 4.03 per cent.

"Monetary markets are now even pricing in a small chance – about 4 per cent – of a rate hike by August, while pricing out almost any bet of a rate cut this year. Total easing expected this year has been cut to 3 basis points, down from 17 bps before," Mr Felsman says.

CBA head of international economics Joseph Capurso says the Aussie dollar jumped above US65.20c after the stronger-than-expected first quarter CPI.

"Interest rate markets are now pricing only a small chance of a sole 25 basis point rate cut by the end of the year," Mr Capurso says. "Our Australian Economics team note the clear risk is a later start date to the easing cycle of November versus the current September base case."

3:32 pm April 24, 2024

UBS now sees February rate cut

Megan Neil

UBS has delayed the timing of the first RBA interest rate cut until February, pushing back its forecast from November after the latest inflation data.

UBS economist George Tharenou says domestic inflation remains very sticky.

"Overall, inflation continues to moderate year-on-year, but headline CPI remains stuck above the RBA's target band of 2-3 per cent year-on-year for a record 12 quarters; and 'core' is still very sticky," he says.

Mr Tharenou says UBS reiterates its view of 'higher-for-longer' interest rates.

"However, the cumulative data trends mean that we delay our forecast of the first RBA cash rate cut of 25 basis points to February 2025 (was November 2024). We still see a relatively slow easing cycle of 25bps per quarter, but our end-25 forecast is also revised up 25bps to 3.35 per cent (was 3.10 per cent).

"If inflation remained more sticky than expected in 2025, it would make it difficult for the RBA to cut. More broadly, UBS still see the RBA lag easing by other global central banks."

3:12 pm April 24, 2024 Highlight

Little hope of RBA cuts in 2024: Citi

Megan Neil

The "hot" CPI result has poured cold water on hopes of RBA rate cuts in 2024, according to Citi economists who have pushed back their expectations for the first easing from November until February.

Citi chief economist Josh Williamson says inflation remains sticky across the services and housing sector, while regulated price rises are also not doing the RBA any favours.

"Although inflation should decelerate in Q2, we still see a higher underlying inflation profile in 2024.

"High labour costs continue to pose upside risks to inflation. Consequently, we now see little hope that the RBA can cut policy rates in 2024. We remove our 25 basis point cut in November and push it out to February."

3:01 pm April 24, 2024

Climate protesters disrupt Woodside AGM

Paul Garvey

Around 20 climate protesters have disrupted Woodside Energy’s annual general meeting, drowning out chairman Richard Goyder with a flash mob.

The group, seated in the centre of the Crown ballroom, stood and broke out in song, singing ‘Woodside is over’ to the tune Crowded House’s ‘Don’t dream it’s over’.

Mr Goyder continued the meeting amid the protest, with the protesters eventually leaving the room voluntarily.

Another group of protesters then began shouting, with security stepping in to remove them.

There was strict security at Wednesday’s meeting, after activists tried to smuggle smoke bombs into last year’s event.

Large bags were prohibited from being brought into the ballroom, while dozens of police officers were in attendance to monitor a protest of around 200 people gathered at the main entry road into the Crown complex.

2:56 pm April 24, 2024

CBA flags risk of later rate cuts

Megan Neil

CBA economists say the stronger-than-expected inflation data means the risk now sits with a later start to the RBA's rate cutting cycle.

CBA economist Stephen Wu says the upside surprise predominantly came through on the non-discretionary and non-tradables components of the CPI basket. "The upshot is that the key drivers of inflationary pressures in Australia are centred around parts of the CPI basket where consumer demand is less able to respond to higher prices."

Mr Wu says some components of the CPI basket are proving stickier than anticipated.

"Heading into the Q1 24 CPI data today the balance of risks around our September RBA rate cut call were evenly balanced. Post the stronger‑than‑expected CPI print, higher than both our and the RBA’s implied profile, as well as the gradual loosening in the labour market thus far, suggests the risk now sits with a later start date to the first rate cut."

Mr Wu notes that the next RBA board meeting after September is in November, when the RBA will have the added benefit of seeing an additional quarterly CPI print, released in late October, before cutting interest rates.

2:46 pm April 24, 2024

AMP pushes back rate cut timing

Megan Neil

AMP economists now believe the RBA will not start cutting interest rates until later in the year, after stronger-than-expected March quarter inflation data.

AMP deputy chief economist Diana Mousina says given the inflation data was higher than the RBA's latest February forecasts, there is a risk that the central bank's forecasts will need to be revised up in its next update in early June.

"This may see the RBA move back to a tightening bias (from a neutral bias) as the board may debate whether another rate hike is needed," Ms Mousina says.

"Our view that rate cuts would start around mid-year has been challenged by the stronger economic backdrop and low unemployment rate which has led to inflation staying elevated. Today’s inflation data removes the chance of any near-term rate cut.

"But, we think we can still see a rate cut by the end of the year as the leading indicators of softer employment growth, lower inflation and subdued consumer spending remain intact."

2:41 pm April 24, 2024

Star CEO-chair texts 'disappointing': director

Glen Norris

Star non-executive director Anne Ward has told the Bell inquiry she was "surprised and disappointed" at the content of messages between then-chief executive Robbie Cooke and chair David Foster that discussed war with the regulator and considered a class action against it.

Ms Ward said the content of the messages had the capacity to damage the relationship with regulators.