ASX200: Consumer Confidence, Inflation, and Commodities in Focus

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The Majors

It was a 2nd consecutive day in the red for the ASX200 on Tuesday.

Following a 0.06% decline at the start of the week, the ASX200 fell by 0.24% to end the day at 7,434.2.

A marked pickup in business confidence and business conditions failed to spur a rally on the day.  There was also little support from the U.S, in spite of gains across the majors on Monday.

A slide in bank stocks offset the impact of rising commodity stocks, leaving the index in the red.

National Bank of Australia weighed on the banking sector in response to an outlook warning on margins.

The Stats

In October, the NAB Business Confidence Index increased from 10 to 21, coming in ahead of a forecasted 15.

According to the October Survey,

  • Easing of the latest lockdown measures drove confidence at the start of the quarter.
  • Capacity utilization recovered in October, rising back to 81.5%, with forward orders rebounding to +15 index points.
  • In September, forward orders had been negative.
  • Inflation indicators remained elevated, with purchase cost growth hitting decade highs, with labor costs growth accelerating.

The Market Movers

It was a mixed day for the banks. ANZ and Westpac led the way down, with losses of 1.55% and 1.40% respectively. CBA wasn’t far off, declining by 1.20%, while Macquarie Group and NAB ended the day down by 0.45% and by 0.67% respectively.

Commodity stocks also had a mixed session. Newcrest Mining hit reverse, falling by 1.58%, with Rio Tinto ending the day down by 0.19%. BHP Group and Fortescue Metals Group Ltd found support, however, rising by 0.96% and by 1.81% respectively.

Other Asian Markets

Elsewhere, it was a mixed session, with the Hang Seng Index rising by 0.20% to buck the broader market trend.

The CSI300 and the Nikkei 225 ended the day with relatively modest losses of 0.03% and 0.75% respectively.

The Day Ahead

It’s a quiet day ahead on the Asian economic calendar. Westpac Consumer Confidence figures for November will be in focus early in the session.

Consumer spending is key to the economic recovery. Expect any weak numbers to test support.

The markets will be looking for improved confidence in response to the easing of lockdown measures.

From China, inflation figures for October will also influence market risk sentiment.

Away from the economic calendar, corporate earnings will need monitoring.

The Futures

In the futures markets, at the time of writing, the ASX200 was up by 17 points.

For a look at all of today’s economic events, check out our economic calendar.