ASX 200 Rebounds on Retail, Utilities Strength

The ASX 200 advanced 49 points, or 0.6%, to close at 8,653 on Wednesday, halting losses in the prior three sessions amid solid gains in retail trade, logistics, utilities, and transport. Traders shrugged off weaker U.S. futures, betting the Reserve Bank of Australia may pause cash rates next week after three hikes this year. Meanwhile, business sentiment in May improved, with the reading hitting a three-month high despite staying in negative readings, while business conditions held steady. In main trading partner China, annual inflation was stable at 1.2% in May, with transport costs rising while food prices posted the steepest drop in seven months. Notable gainers included Coles Group (5.0%), CSL Ltd. (3.5%), Woolworths Group (3.2%), and Aristocrat Leisure (2.2%). Three of the big four banks also rose between 0.9% and 2%. In contrast, Sigma Healthcare slumped 5.5% after confirming preliminary talks over a potential acquisition of British pharmacy chain Boots.

Australian equities rose 29 points, or 0.3%, to 8,633 in Wednesday morning trade, snapping a three-session losing streak on strength in logistics, consumer services, and retail. Sentiment was supported by robust May trade data from top trading partner China, where exports hit a record, and imports accelerated. Locally, Australia's trade surplus shifted to a surplus in April as exports rebounded. Meanwhile, hopes grew that the Reserve Bank will pause cash rates next week after three hikes this year. However, gains were capped as U.S. stock futures slipped as tensions in the Middle East ramped up again following Washington’s “self-defense strikes” against Iran in response to a helicopter downing Tuesday. Early standouts included PLS Group (2.0%), Insurance Australia Group (1.9%), and Medibank Private (1.2%), while two of the big four banks posted modest gains. Investors now await China’s May CPI and PPI data later today, amid signs of growing inflationary pressures in recent months.

The ASX 200 edged down 21 points or 0.2% to end at 8,604 on Tuesday, down for the third session after fresh data showed Australia's consumer confidence fell in June following May's rise and marking its fourth decline this year amid lingering cost-of-living pressures. Separately, business sentiment in May improved but remained firmly negative, due to concerns over the impact of elevated borrowing costs. Still, local markets trimmed early declines after solid May trade data in top trading partner China, as exports hit a record high while imports accelerated. Meanwhile, the Reserve Bank of Australia will hold a policy meeting next week, with traders expecting a pause following three rate hikes since January. In the U.S., stock futures strengthened, following a rebound in chip stocks on Wall Street Monday. Among today's decliners were Lynas Rare Earths(-4.5%), Evolution Mining (-4.2%), Fortescue (-3.5%), and heavyweight BHP Group (-1.7%). Two of four big banks fell between 0.5% and 1%.