The ASX was flat today, closing just 1 point lower at 5826.5pts on Tuesday. However, Australian investors were met with high volatility throughout the day. The ASX gained in the opening hours of trading and then slowly tapered off before the interest rate decision of the Reserve Bank. Following the RBA’s decision to cut interest rates to a record low of 2.0 per cent, the ASX jumped sharply before retreating significantly into negative territory. Both the Materials sector and Metals and Mining Sector were down significantly, falling 1.68 and 1.84 per cent respectively. The Australian dollar made gains against the US dollar, rising significantly, following the widely expected rate cut.
International markets reacted to positive US data in the previous day of trading. In the US, the Dow Jones was up .26 per cent and the S&P 500 was up .29 per cent. In Europe, the DAX was up 1.44 per cent and the FTSE 100 was up .36 per cent. In Asia, the Nikkei 225 is floating around its previous gains from Monday, around .06 per cent near the end of trading on Tuesday. Chinese markets have fallen sharply. The Hang Seng is down 1.32 per cent while the Shanghai Composite is down 2.53 per cent so far on Tuesday.
Australia and New Zealand Banking Group (ASX:ANZ) was up 88c, or 2.65 per cent, at $34.12 per share. ANZ released its half-year profit report on Tuesday, which showed a 5 per cent increase in profits.
Westpac Banking Corporation (ASX:WBC) was down 32c, or 0.90 per cent, at $35.28 per share. On Monday, Westpac reported that its half-year profits were flat relative to the previous corresponding period. Both Goldman Sachs and Morgan Stanley downgraded the bank.
Ardent Leisure Group (ASX:AAD) was up 22.5c, or 11.34 per cent, at $2.21 per share. Ardent reported an 11 per cent earnings increase in the third quarter after a strong performance in its US family entertainment division.
Seven West Media (ASX:SWM) was down 1.5c, or 1.15 per cent, at $1.30 per share. Shares of SWM have retreated less than a week after the company asked investors for $612m.
Author: Simon Herrmann
May 05, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.