Category: Stock Market

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• 3 big questions about the Australian stock market in 2024
• Big ASX 200 news! Aussie shares just reached a new record high
• This ASX 200 stock has rocketed 42% in six days. Here’s why
• ASX 200 off to the races as Australia’s inflation data surprises to the downside
• Why Bubs, Champion Iron, Playside Studios, and Select Harvests shares are charging higher

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended HomeCo Daily Needs REIT and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Last week, my Fool colleague James penned a piece on Lake Resources N.L. (ASX: LKE) shares. We posited the question of whether this ASX lithium stock might be going to zero.

This followed what was then a new multi-year low for the Lake Resources share price. As my colleague went into at the time, Lake has been suffering immensely from the recent collapse in lithium prices, which has rendered its major Kachi project potentially unprofitable.

The company could well have issues raising any additional capital to cover its cash problems. As such, my colleague concluded that “zero seems like it could be a real possibility down the line” for Lake Resources shares.

At the time of writing, the Lake Resources share price is sitting at 9.5 cents each. Today, the company has shed another 5.15% of its value and is now down 8% from where it was last week to 9.2 cents a share.

Its 12-month share price losses now stand at a depressing 88.8%.

Investors shun Lake Resources shares after quarterly update

Investors don’t seem to have reacted too well to Lake Resources’ latest quarterly update, which was released today during trading hours. It seems that investors have taken this report as even more bad news.

So for the quarter ending 31 December 2023, Lake reported that it lost $17.97 million through operating its activities. That left its cash balance at $31.3 million at the end of the quarter, down from $60.28 million at the end of the previous quarter.

The company also has $36.19 million of unused cash left in a finance facility, for a total available funding of $67.5 million. Lake Resources estimates that this is enough cash to fund another 2.48 quarters of operation.

However, Lake also highlighted that it was able to reduce expenditures by approximately 20% over the quarter in question. It is also expecting to be able to cut costs by a further 40% over the current quarter (ending 31 March 2024).

Even so, it’s clear from investors’ reaction today that they are not too keen on what Lake Resources had to say. It will be interesting to see where the company stands at the end of March.

The post More bad news: Why Lake Resources shares are plunging 5% today appeared first on The Motley Fool Australia.

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More reading

• Are Lake Resources shares going to zero?
• Downgraded: Why Lake Resources shares just lost a bull
• Could the Lake Resources share price double in 2024?
• Lake Resources shares sank 84% in 2023: Will this year be better?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Qantas Airways Limited (ASX: QAN) shares have been through a fair bit of pain. In the past six months, the ASX travel share has dropped 15%. Over that time, the S&P/ASX 200 Index (ASX: XJO) has risen 3%, so Qantas has underperformed by close to 20%. Can we look to history as to how Qantas could surprise this ASX reporting season?

A lot of stocks have risen in the last few months, but Qantas shares have faced a number of negative headlines relating to tickets being sold that seemingly shouldn’t have been sold, a ruling that Qantas illegally fired workers and more.

But, despite all of the issues, it’s possible that Qantas’ result release could be more positive than investors are expecting.

Priced for weakness

It’s understandable that the Qantas share price has dropped in light of these issues. There are also other factors that could impact the ASX travel share, including its need to spend heavily on replacing a large number of its planes.

But, ultimately, Qantas shares look as though they’re priced really cheaply considering how much profit Qantas might generate in FY24.

I think it’s a good idea to keep in mind a quote from Benjamin Graham – thought of as the person who taught legendary investor Warren Buffett – about markets and share prices:

In the short run, the market is a voting machine but in the long run it is a weighing machine.

In other words, the popularity of a stock can send the price lower in the short term, but it’s the financial performance that will drive things in the longer term.

Is the Qantas share price good value?

Qantas reported in FY23 that it generated $2.47 billion of underlying profit, $1.74 billion of statutory net profit after tax (NPAT) and 96 cents of statutory earnings per share (EPS).

If Qantas generated the same statutory numbers in FY24, the Qantas share price would be valued at less than 6 times profit. I think that’s a very low price/earnings (P/E) ratio.

The airline’s chair revealed, very briefly, at the company’s annual general meeting (AGM) in early November that “travel demand continues to be strong”. While this doesn’t give us much of an insight, it implies good financial performance is continuing. The oil price is, for now at least, still in the US$70s per barrel, down from the US$80s in October and November.

Qantas said at the AGM it had increased its fare prices to offset some of this higher oil cost.

The profit estimate on Commsec and from broker UBS both suggest Qantas could generate roughly the same EPS in FY24 as FY23, and that profit could keep rising in the years ahead.

The market seemed to underestimate how much travel demand there would be in the second half of 2022, and history showed that was a mistake.

There’s a fair chance that the FY24 first half result, and FY24 overall, could surprise positively in terms of how strong profit generation continues to be.

I wouldn’t bet ‘the house’ on Qantas shares, but it may be one of the most unloved ASX 200 shares at the moment, which could end up meaning it’s a contrarian opportunity for the longer term.

The post If history repeats itself, Qantas shares could surprise this reporting season appeared first on The Motley Fool Australia.

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More reading

• These ASX 200 blue chip shares can rise 30% to ~50%
• 3 ASX 200 value stocks I’d buy for my portfolio today!
• Buying Qantas shares? You’ll want to know about this ‘red flag’
• Here are the top 10 ASX 200 shares today
• If I invest $10,000 in Qantas shares, how much passive income will I receive in 2024?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Australian stock market is already off to a flying start in 2024 so far. Sure, we’re now at the tail end of January, and the S&P/ASX 200 Index (ASX: XJO) has ‘only’ appreciated by around 0.2%.

But when you consider that we’ve just seen a new record high for ASX 200 shares minted, it’s not too bad. Especially so if we take into account that the ASX 200 Index has risen more than 12% since the start of November.

But even though we’re one month down in 2023 so far, there are 11 to go. So let’s go through three big questions that you might have about the ASX 200 in 2024

Will the Australian stock market hit more record highs this year?

First up, let’s talk about the new all-time record high that the ASX 200 hit just today. Today’s high of 7,658.7 points is a welcome development for all ASX 200 investors, who have had to wait more than two years to see a fresh record following the index’s last record in August 2021.

But now that this goal has finally been achieved, many investors will start wondering just how many new highs we might see this year. Can the ASX 200 hit 7,700 points? Maybe 7,900, or even 8,000 points?

Only time will tell. But if interest rates do start dropping in 2024 (as investors now clearly expect them to) without triggering an economic downturn, it could well push the ASX 200 to fresh heights.

Will interest rates start falling?

On that note, let’s talk about interest rates. As we touched on this morning, the legendary investor Warren Buffett once described interest rates as ‘financial gravity’, pulling everything else down to earth.

There’s little doubt that the pullbacks we saw from August 2021’s all-time high for the Australian stock market were caused by the massive runup of interest rates over the succeeding 18 months or so.

But could the reverse happen in 2024? Well, if the RBA does decide that inflation is now firmly back under control (which, after today’s numbers, seems more likely than ever), we could indeed see rates begin to drop again.

Investors have probably already baked in at least one cut this year for the Australian stock market, judging by today’s euphoric highs. But if inflation continues to drop faster than expected, we could well see multiple cuts.

Of course, the opposite is also true. If inflation picks up again, we could be looking at a 2024 with no cuts, or perhaps even a hike.

What will the dividends be like from ASX 200 shares?

Let’s talk about ASX shares themselves now. One of the most anticipated areas that investors focus on in the share market is what kinds of dividends are coming their way.

Given the unique structure of the Australian stock market (and our franking system), dividends form a major component of long-term returns.

Looking at an exchange-traded fund (ETF) like the SPDR S&P/ASX 200 ETF (ASX: STW), we can see that over the past 22 years or so, investors have enjoyed more returns through dividends than through capital growth.

So it goes without saying that investors will be paying attention to what kinds of dividends are coming out of the ASX 200 in 2024.

In particular, I’ll be watching the big four banks like Commonwealth Bank of Australia (ASX: CBA) and National Australian Bank Ltd (ASX: NAB). As well as miners like BHP Group Ltd (ASX: BHP) and Fortescue Ltd (ASX: FMG).

Also worth keeping track of are Telstra Group Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW), Woodside Energy Group Ltd (ASX: WDS), Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL).

If the majority of these blue chip ASX 200 shares give investors a dividend pay rise, it could help push up the entire Australian stock market.

The post 3 big questions about the Australian stock market in 2024 appeared first on The Motley Fool Australia.

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More reading

• Big ASX 200 news! Aussie shares just reached a new record high
• ASX 200 off to the races as Australia’s inflation data surprises to the downside
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• ASX 200 record! Here’s why Aussie shares are on the cusp of a new all-time high

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank, Wesfarmers and Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group, Telstra Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Federal Court has ordered Westpac Banking Corp (ASX: WBC) to pay a total of $9.8 million for its actions relating to a $12 billion interest rate swap deal in 2016.

The Australian Securities and Investments Commission, which brought on the legal action after an investigation into the transaction, had told the court that the deal exposed Westpac’s client to serious risk.

The court ultimately agreed, calling Westpac’s actions as “unconscionable conduct” in its judgement.

Westpac will pay a penalty of $1.8 million, as well as $8 million for ASIC’s legal and investigation costs.

“Westpac’s behaviour was unconscionable and exposed its client to significant risk,” said ASIC deputy chair Sarah Court.

“Westpac’s conduct was also in stark contrast with several other banks.”

The fine was the largest legally possible for the time of the offence. 

The same conduct now could attract a penalty that’s the larger of $782.5 million or three times the benefit derived.

Westpac made millions after pre-hedging without client consent

The detrimental conduct came when Westpac pre-hedged in advance of an interest rate swap transaction with a consortium acquiring electricity provider Ausgrid from the NSW government.

Despite concerns expressed by its client about how the pre-hedging could make the swap deal ultimately cost them more money, Westpac did it anyway without consent.

In doing so, the bank’s derivatives trading desk made a trading profit of about $20.7 million on the day the swap was executed. The sales team directly received $3.7 million of commission.

To this day, the $12 billion interest rate swap remains the largest transaction of its kind in Australian history.

“This is a significant outcome which assists to clarify expectations regarding pre-hedging, particularly around disclosure and consent,” said Court.

“Appropriate conduct for pre-hedging is an issue of global significance.”

The Federal Court found that Westpac had inadequate mechanisms to manage the conflict between its own interests and the consortium’s. The bank had not done enough to make sure the transaction was provided to the client “efficiently, honestly and fairly”.

A Westpac spokesperson told The Motley Fool that the bank had “already taken action to strengthen processes and policies in relation to pre-hedging activity”.

“Provision for the settlement was made in Westpac’s 2023 financial year results.”

The court reserved a decision as to whether Westpac will be ordered to complete a compliance program and an independent review into its pre-hedging practices.

The Westpac share price is down around 20% from January 2016.

The post Westpac ordered to pay $10 million after ‘unconscionable conduct’ appeared first on The Motley Fool Australia.

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More reading

• Breaking! NAB shares (and CBA) just hit a new 52-week high
• Buy Westpac and these ASX 300 dividend shares now: analysts
• Why this top broker just upgraded the outlook for Westpac shares
• If you’d bought $10,000 of Westpac shares in January 2022, here’s what you’d have now!
• What will my ASX 200 bank stocks be worth in 5 years?

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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We have some big ASX 200 news to report this Wednesday. The S&P/ASX 200 Index (ASX: XJO) has just hit a new all-time high.

Aussie shares had been threatening to crack the record set in August 2021 for the past week or so. Yesterday saw the ASX 200 Index get tantalisingly close to cracking its previous high watermark, getting within three points of the record at one stage.

But investors have blown through yesterday’s high of 7,630.5 points with ease during today’s session. The ASX 200’s previous 2021 record high was 7,632.8 points. But just after 1 pm today, the ASX 200 climbed up to 7,643.5 points – its new reigning record high.

Today’s gains put the ASX 200 Index up 0.2% year to date in 2024, as well as up 2.23% over the past 12 months. However, the Aussie share market is also up a far more impressive 12.8% since the end of October 2023.

Why is the ASX 200 Index clocking record highs today?

Yesterday, we discussed a few reasons why investors have flooded back into ASX 200 shares over the past few months, pushing up the index to where it is today. Amongst the factors we discussed were falling inflation amid a strong economy with low unemployment, an expectation of lower interest rates by the end of the year, and a surging American stock market.

Well, it seems that the first two factors are what’s likely to have helped push ASX 200 investors over the top today.

Earlier this morning, my Fool colleague Bernd discussed the latest inflation statistics for the Australian economy. They were released by the Australian Bureau of Statistics (ABS) earlier today. He also went into the implications for the ASX 200 Index.

As discussed, commentators were expecting inflation to come in at an annualised 4.3%. Instead, inflation in the 12 months to 31 December dropped to 4.1%. My colleague astutely noted that this is “a massive improvement on the blistering 7.8% peak annual CPI levels reported in December 2023”.

So we have Australian inflation running at 4.1%. And yet the Reserve Bank of Australia (RBA)’s cash rate is still sitting at 4.35%. So you can see where we’re going next.

Falling inflation key to new ASX highs

This latest data will arguably give the RBA a strong incentive to make sure the next interest rate move is a cut, rather than a hike. If the RBA keeps the cash rate above the level of inflation for a prolonged period, it could increase the risk of a recession.

As such, it appears investors are rapidly bringing forward their expectations for a rate cut today in light of this latest data. Interest rates were once described by legendary investor Warren Buffett as the ‘gravity’ of the financial world. The higher they are, the more they pull every asset’s valuation down. And that includes ASX 200 shares.

There’s little doubt that the stagnation that the ASX 200 Index went through between August 2021 and August 2023 was at least partially due to the massive rate hiking spree the RBA went on during this period. But now investors are pencilling in rate cuts, and sooner rather than later, it’s no surprise to see investors enthusiastically flocking back into ASX 200 shares.

Let’s see how many more record highs the ASX 200 Index will give us in 2024.

The post Big ASX 200 news! Aussie shares just reached a new record high appeared first on The Motley Fool Australia.

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More reading

• ASX 200 off to the races as Australia’s inflation data surprises to the downside
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• ASX 200 record! Here’s why Aussie shares are on the cusp of a new all-time high
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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 S&P/ASX 200 Index (ASX: XJO) lithium shares haven’t had an easy time of it recently.

To say the least.

ASX lithium stocks, large and small, have taken a beating amid a massive fall in global lithium prices.

While relatively stable over the past month, the lithium price is down more than 80% since the November 2022 highs, with prices down some 50% over the past six months alone.

With that headwind in mind, here’s how these four ASX 200 lithium shares have performed over the past six months:

• Pilbara Minerals Ltd (ASX: PLS) shares are down 26%
• Core Lithium Ltd (ASX: CXO) shares are down 70%
• IGO Ltd (ASX: IGO) shares are down 43%
• Liontown Resources Ltd (ASX: LTR) shares are down 62%

For some context, the ASX 200 has gained 2.7% over this same period.

Those certainly aren’t the kinds of results investors want to see.

But the pain for ASX 200 lithium shares may not be over quite yet.

More headwinds ahead for ASX 200 lithium shares?

Much of the pressure on global lithium prices over the past year has come as exploration and mining activity for the battery-critical metal have ramped up. This has seen supplies increase faster than demand growth.

To be clear there’s still plenty of growth ahead for the EV industry, and for those ASX 200 lithium shares that can weather the current pullback.

However, in another potential headwind for lithium producers and explorers alike, the growth rate in global EV markets is slowing markedly.

China ends subsidies

China, the world’s biggest consumer of lithium, recently ended EV subsidies and other incentives for the industry.

And that looks to already be having a marked impact on the growth outlook for EV sales, potentially impacting the demand for lithium from ASX 200 lithium shares.

According to the China Passenger Car Association (courtesy of Bloomberg), China’s EV and plug-in hybrid vehicle deliveries to dealers is forecast in increase to 11 million in 2024. While that’s still 25% higher than last year, it represents a slowdown from 36% in 2023 and a whopping 96% in 2022.

But it’s not just China’s slowing growth figures that could hit ASX 200 lithium shares in 2024.

Supply and demand

“Global EV momentum is stalling. The market is over-supplied versus demand,” Morgan Stanley analyst Adam Jonas said (quoted by Reuters).

In the United States, the world’s biggest economy, General Motors Co (NYSE:GM) is prepared to adjust its EV goals and potentially boost its planned manufacturing of internal combustion engine (ICE) vehicles.

“It’s true, the pace of EV growth has slowed, which has created some uncertainty. We will build to demand,” GM CEO Mary Barra said.

GM CFO Paul Jacobson added, “We know the EV market is not going to grow linearly. We are prepared to flex between ICE and EV production.”

Tim Piechowski, portfolio manager at ACR Alpine Capital Research, said (quoted by Reuters):

There’s no doubt that the limitations – EV charging and the lack of battery resiliency at low temperatures – are causing consumer anxiety.

The reality is that the adoption curve will be slower and there will be pushback to regulators about fuel economy. It’ll just be a longer ramp than perhaps was initially anticipated.

It’s with that longer ramp in mind that we’ve recently seen a number of ASX 200 lithium shares reduce their expansion plans. Or, in the case of Core Lithium, even temporarily halt mining operations to conserve cash.

Of course, it is still a growing industry. Just not quite as fast as many investors had been hoping.

The post Uh oh! Does this spell more bad news for ASX 200 lithium shares? appeared first on The Motley Fool Australia.

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More reading

• Liontown share price slips as plunging lithium price outweighs pending maiden production
• Why are IGO shares crashing 9% on Wednesday?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Top 5 most profitable ASX large-cap shares of 2023

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended General Motors and has recommended the following options: long January 2025 $25 calls on General Motors. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 300 Index (ASX: XKO) stock Select Harvests Ltd (ASX: SHV) has jumped 16% after the company released an exciting 2024 update.  

The Australian almond grower is benefiting from an improving situation for pricing and a healthy crop update.

Favourable conditions for 2024 crop

Select Harvests revealed that the 2024 crop is in the final stages of the growing cycle and the harvest is expected to start next week, which is two weeks earlier than normal. It’s finalising pre-harvest preparations across all sites.

The ASX 300 stock said the current weather forecast for the harvest period is “favourable” and the crop is forecast to exceed 30,000MT and return to a “quality profile” in line with long-term averages.

Pleasingly, the company said its initiatives are continuing to reduce production costs, while the recent cooler and wetter weather has led to lower requirements for water, irrigation electricity demand and a decline in water pricing.

It expects “further value” to be created as it continues to work on and deliver its current projects and identify additional opportunities.

Improving market conditions

Select Harvests said global almond market conditions are “increasingly positive”.

The ASX 300 stock pointed to key US industry participants, such as growers, marketers and processors, are forecasting that the US 2023 crop will be approximately 6% to 12% lower than the USDA 2023 objective estimate.

On top of that, the US 2023 crop is forecast to be of lower quality with increased instances of navel orange worm damage and sub-optimal sizing, with a doubling of the normal defect rate being reported by the Almond Board of California.

December 2023 saw the fourth consecutive month of US shipments growth, according to the Almond Board of California Position Report. The 2023-2024 year-to-date US shipments are up 9.9%, with “improvements in export markets and the US domestic market remaining steady”.

Unsurprisingly, the US inventory levels have decreased year over year and are currently at 1.8 billion pounds, 13.4% lower than December 2022. The forecast 2024 carryout inventory has reduced to 0.6 billion – that’s 21.9% lower than the 2023 carryout position.

Pricing for Select Harvests’ almonds

Select Harvests said its 2023 export program is complete. All remaining inventory is planned to maintain value-add production and domestic customer contracts.

Market prices for almonds are “rising”, particularly for higher grade material, and export markets are becoming “increasingly active. Based on a normal crop profile Select Harvests’ net sell price is currently above A$7.50 per kg and “may increase further based on market demand.”

Marketing of its 2024 crop began in January, with approximately 10% pre-sold at “attractive pricing levels.” More than 60% of the 2024 crop is hedged at an Australian dollar to US dollar exchange rate of 0.66.

The other financial aspect of the ASX 300 stock’s update revealed that its debt position remains “on track” and that the company remains within its facility headroom and covenants are forecast to be met.

Select Harvest share price snapshot

Despite today’s strong rise, the company is still down more than 8% in the past year.

The post Up 16%! A strong update is sending investors nuts over this ASX 300 stock appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) and most ASX 200 stocks have had a phenomenal run over the past week or two.

It was only back on 18 January that the ASX 200 was sitting at under 7,350 points. But fast forward to today, and that same index has vaulted up to over 7,600 points. That’s a rise worth more than 3.6%. Just yesterday, we also saw the ASX 200 get within a whisker of its all-time record high.

But let’s talk about one ASX 200 stock that puts those gains to shame.

It’s ASX 200 nickel producer Nickel Industries Ltd (ASX: NIC). Nickel Industries shares have enjoyed an extraordinary run over the past six trading days. Back on Tuesday 23 January, the company was asking 56 cents a share. But today, those same shares are going for 79 cents each.

That’s up a whopping 8.97% today alone, as well as up over 41% from 23 January.

So what on earth is going on with this ASX 200 nickel stock that has prompted this incredible spike in value for investors?

ASX 200 stock catapults after positive quarterly update

Well, it seems the biggest contributor to this jump in value is Nickel Industries’ latest quarterly earnings report. Of the 40% or so the ASX 200 stock has jumped in the past six trading days, more than 30% of those gains occurred yesterday and today thus far.

Released yesterday, this report revealed both record nickel production and sales volumes. As we went through at the time, Nickel Industries reported production of 34,450 tonnes of nickel over the three months to 31 December. That was up from 29,367 tonnes over the previous quarter.

Nickel Industries was also able to sell a record 34,427 tonnes of nickel over the quarter, an 18% jump from the previous quarter.

Earnings before interest, tax, depreciation and amortisation (EBITDA) did fall over the quarter, dropping from US$97.6 million down to US$85.1 million. Still, Nickel Industries had US$1.3 billion in cash and inventory in the bank as of 31 December.

Also worth noting was Nickel Industries’ new share buyback program. In addition to a more generous dividend policy, the ASX 200 stock has committed to return “up to” $100 million to investors through on-market share buybacks over the coming 12 months.

So considering all of this, it’s not hard to see why ASX 200 investors might be keen to buy up Nickel Industries shares right now. Despite these healthy gains though, the Nickel Industries share price remains down by more than 28% over the past 12 months.

The post This ASX 200 stock has rocketed 42% in six days. Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) was down 0.4% in early morning trade today and just about flat at 11:30am AEDT. That’s when the Australian Bureau of Statistics (ABS) released the latest Consumer Price Index (CPI) data.

In the minutes that followed, ASX 200 investors sent the benchmark index soaring to be up 0.3% for the day, though it’s since given back much of those gains.

Here’s why the latest batch of CPI data sent the benchmark index sharply higher.

ASX 200 investors celebrating CPI data

The ASX 200 is charging higher following news that inflation in Australia increased 0.6% in the December quarter and 4.1% annually. That’s significantly below analysts’ consensus expectations of a 4.3% annual increase in inflation.

And it represents a massive improvement on the blistering 7.8% peak annual CPI levels reported in December 2023.

This looks to be giving ASX 200 investors hope that Australia’s official cash rate of 4.35% (up from a rock bottom 0.10% on 3 May 2022 when the RBA began its rapid tightening cycle) has peaked.

ABS head of prices statistics Michelle Marquardt said, “While prices continued to rise for most goods and services … this was the smallest quarterly rise since the March 2021 quarter.”

The biggest contributors to the ongoing price rises Down Under were housing, up 1.0%; alcohol and tobacco, up 2.8%; insurance and financial services, up 1.7%; and food and non-alcoholic beverages, up 0.5%.

Commenting on the 1.5% increase in the price of new dwellings purchased by owner occupiers fuelling the big increase in housing prices, Marquardt said:

Higher labour and material costs contributed to price rises this quarter for construction of new dwellings. The 1.5% increase is slightly higher than the 1.3% rise in September 2023 quarter.

And renters weren’t spared some extra cost of living pain either. Rental prices rose 0.9% for the quarter, down from a 2.2% increase in the September quarter. However, excluding the changes to Commonwealth Rent Assistance, rental prices would have increased by 2.2%.

Though that doesn’t appear to be spooking ASX 200 investors today.

Now what?

The next RBA interest rate decision will be announced on Tuesday, 6 February.

While inflation is still more than twice the lower end of the RBA’s 2% to 3% target range, today’s promising figures make another interest rate hike from the central bank significantly less likely.

Though it would be premature for ASX 200 investors to factor in the first RBA interest rate cut just yet.

The post ASX 200 off to the races as Australia’s inflation data surprises to the downside appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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