The Australian sharemarket ticked up on Monday, with gains in technology and financials offsetting weakness in healthcare and property stocks ahead of Tuesday’s highly anticipated Reserve Bank of Australia (RBA) policy meeting.
The S&P/ASX 200 index edged up 12.9 points, or 0.2%, to finish at 8,894.8. Five of the eleven sectors advanced while six declined.
Investor expectations for a Melbourne Cup Day rate cut have evaporated following last week’s stronger-than-expected inflation figures.
Inflation rose 1.3% in the September quarter, more than double the RBA’s forecast of 0.6%, prompting traders to price in virtually no chance of a rate move on Tuesday.
The RBA is now expected to revise its inflation forecasts higher and acknowledge persistent price pressures in its updated Statement on Monetary Policy to be released alongside the rate decision.
Technology stocks led Monday’s gains, with shares of TechnologyOne up 0.8%, Xero gaining 2.3% and WiseTech Global up 0.6%.
Financials were another bright spot, buoyed by solid bank earnings. Westpac climbed 2.8% after reporting a full-year net profit of $6.97 billion, narrowly beating expectations.
The bank’s net interest margin slipped by one basis point to 1.94%, with Westpac citing “persistent competition” across lending and deposits.
Commonwealth Bank lifted 2.3%, while NAB and ANZ each traded 0.9% higher.
In contrast, healthcare names dragged on the broader index. ResMed tumbled 4.3%, while Cochlear and CSL fell 1.1% and 1.7%, respectively.
Property stocks also weakened as bond yields edged higher; Goodman Group lost 0.2%, Scentre declined 0.5% and Stockland dropped 0.8%.
Among individual movers, defence technology firm DroneShield finished flat after announcing a $25.3 million contract via a reseller with a Latin American government client.
HealthCo Wellness REIT gained 7.4% after confirming it had received all deferred rent from hospital operator Healthscope, which had fallen behind earlier this year.
Its fund manager, HMC Capital, also rose 4.8%.
On the bond market, yields firmed slightly, with the 10-year rate up 0.2% to 4.348% and the 2-year yield gaining 0.8% to 3.6%.
