‘Good enough’: ASX jumps on positive inflation reading

The ASX200 has jumped to within touching distance of an all-time high on the back of market friendly inflation data released on Wednesday.

Banks, property and supermarket shares drove the ASX to a near record high on Wednesday after quarterly inflation all but confirmed an interest-rate cut when the Reserve Bank of Australia board meets in August.

The benchmark ASX 200 jumped 51.80 points or 0.60 per cent to 8,756.40, with the market lifting after 11.30am on the CPI data from the Australian Bureau of Statistics.

The broader All Ordinaries also traded higher up 48.70 points or 0.54 per cent to 9,015.40.

Australia’s dollar slid on the news down 0.05 per cent to US 65.09 cents.

Six of the 11 sectors finished in the green.

The ASX 200 jumped on the back of quarterly inflation data. Photo: Gaye Gerard / NewsWire

Shares related to a rate cut jumped on the news.

Gains were led by the major banks with bourse heavyweight CBA up 1.55 per cent to $176.99, NAB gained 0.71 per cent to $38.47, Westpac jumped 1.60 per cent to $33.72 and ANZ closed 1.25 per cent higher to $30.70.

Woolworths Group added 1.58 per cent to $31.44, Coles jumped 1.72 per cent to $20.65 and Endeavour Group is up 1.23 per cent to $4.12.

Stockland shares jumped 2.21 per cent to $5.55, Charter Hall Group gained 1.76 per cent to $20.21 and Mirvac Group gained 2.73 per cent to $2.26.

Betashare chief economist David Bassanese said near enough was good enough for a rate cut as trimmed mean inflation fell to 2.7 per cent for the 12 months until June.

“Underlying inflation is inching closer to the middle of the RBA’s 2 to 3 per cent target band and so justifies a further easing in what – in the RBA’s own words – a still ‘modestly restrictive’ level of interest rates,” he said.

Six of the 11 sectors gained on Wednesday. Photo: Gaye Gerard / NewsWire

Josh Gilbert, market analyst for eToro, described it as hard for the RBA to hold rates.

“After the surprise pause in July, today’s data means an August rate cut is all but nailed on,” he said.

“Markets are now pricing a 93 per cent chance of a cut, and it’s easy to see why. Cost-of-living pressures are easing, and the risk is now skewed towards holding rates too high for too long.”

In company news, Rio Tinto half-yearly earnings fell to a five-year low on the back of weaker iron ore prices throughout the previous six months.

The major iron ore exporter told the market its underlying profits came in at $US4.8bn for the first six months until June 30, which is down from $US5.75bn ($8.83bn) last year

Interim dividends fall to $US1.48 a share versus $1.77 a year ago

Embattled casino operator Star Entertainment used its quarterly update to announce the sale of its Queen’s Wharf precinct in Brisbane was “unlikely” to go through by Thursday’s deadline.

But it also pointed to an improving cash position with Star having $234m in cash and $269m in cash equivalents, as of June 30, up from $44m at the end of March.

Shares in Star Entertainment Group slumped 4.35 per cent to $0.11 following the announcement.

Pointsbet shares rallied a further 4.2 per cent to $1.25 after rival wagering business Betr upped its takeover offer.