Category: Stock Market

One of the most popular and arguably effective investment strategies is buy and hold investing.

This strategy sees investors making investments into shares with a long term focus. The advantage of this is that it allows an investor to benefit from the power of compounding. This is interest on top of interest.

One legendary investor which is a big advocate of this strategy is Warren Buffett. Thanks to some highly successful long term investments over several decades, Mr Buffett has amassed significant wealth.

The good news is that there’s nothing to stop regular investors from following in his footsteps. With that in mind, I have picked out two ASX shares that could be top candidates for a buy and hold investment. They are as follows:

Kogan.com Ltd (ASX: KGN)

The first ASX share to consider is this ecommerce company. While it has just completed a reasonably disastrous 12 months in FY 2021 and the start of FY 2022 has been soft, there’s no doubting that its long term outlook remains very positive.

This is due to its sizeable customer base, strong market position, and the ongoing shift to online shopping. This leaves the company well-placed for growth over the next decade.

Analysts at Credit Suisse appear to believe it is worth looking beyond the short term pain and focusing on the potential long term gains. The broker currently has an outperform rating and $14.06 price target on its shares. This compares to the latest Kogan share price of $10.90.

Nearmap Ltd (ASX: NEA)

Another ASX share that could be a top buy and hold investment is Nearmap. It is a leading aerial imagery technology and location data company with operations in the ANZ and North American markets. While its growth has been a bit inconsistent in recent times, management appears confident it is back on track.

So much so, it is aiming to deliver annualised contract value (ACV) growth of 20% to 40% per annum over the long term. This is expected to be driven by new growth initiatives, geographic expansion, and the launch of new products.

The team at Morgan Stanley are positive on Nearmap. They currently have a buy rating and $3.20 price target on its shares. This compares to the current Nearmap share price of $2.04.

The post 2 buy and hold ASX shares that could help grow your wealth appeared first on The Motley Fool Australia.

More reading

• Harris Technology (ASX:HT8) share price jumps as sales tripled
• These are the 10 most shorted ASX shares
• Kogan (ASX:KGN) share price on watch after $11 million co-founder sale
• 3 growing mid cap ASX shares named as buys
• Here’s what experts are saying about the Kogan (ASX:KGN) share price

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd and Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re searching for growth shares to buy, then the tech sector could be a great place to look.

At this side of the market there are a number of companies with the potential to grow significantly over the next decade.

With that in mind, I have picked out two top tech options that are rated highly. Here’s what you need to know about them:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX tech share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider. Its platform connects tradies with residential and commercial consumers, providing job leads from homeowners and organisations looking for qualified professionals.

Last month it released its full year results and impressed the market with a 22% jump in revenue to $55.8 million. This was ahead of its guidance for FY 2021. In addition, the company revealed that its monthly recurring revenue (MRR) rose 27% year on year to $5.2 million.

In response to this, the team at Goldman Sachs reiterated their buy rating and lifted their price target to $4.35.

Goldman highlights that Hipages currently captures <1% of a total $97 billion tradie business spend. This represents a significant opportunity for growth over the next decade.

Nitro Software Ltd (ASX: NTO)

Another ASX tech share to look at is Nitro Software. It is a software company that is aiming to drive digital transformation in organisations around the world with its Nitro Productivity Suite.

The Nitro Productivity Suite provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution.

Demand for Nitro’s offering has been increasing from businesses of all sizes. This has led to the company’s recurring revenue growing strongly again in FY 2021.

For example, during the first half of the financial year, the company achieved a 56% increase in its annualised recurring revenue (ARR) to US$33.8 million. This puts it on track to achieve its FY 2021 guidance for ARR of between US$39 million and US$42 million.

Wilsons is very positive on the company. It recently retained its overweight rating and lifted its price target to $4.22.

The post 2 exciting ASX tech shares to buy appeared first on The Motley Fool Australia.

More reading

• 3 growing mid cap ASX shares named as buys
• Fund managers are buying these ASX shares
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• Why Zip (ASX:Z1P) and this fantastic ASX growth share could be buys
• 3 excellent ASX growth shares to buy in September

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AMP Ltd (ASX: AMP) share price has been a very disappointing performer in 2021.

Since the start of the year, the embattled financial services company’s shares have lost 31% of their value.

This means the AMP share price is now down 80% over the last five years.

In light of this poor share price performance, the company’s transformation plans, and the appointment of a new CEO, I thought I would look to see what analysts are saying about it shares and whether there is a buying opportunity here.

Where next for the AMP share price?

Unfortunately, I’m not aware of a single broker that is recommending the AMP share price as a buy at the current level.

Though, it is worth noting that a couple of brokers have neutral ratings and price targets on its shares that are notably higher than where they trade today.

For example, according to a note out of Citi from last month, its analysts have a neutral rating and $1.25 price target on its shares.

Based on the current AMP share price, this implies potential upside of almost 15% over the next 12 months. Not bad for a neutral rating.

What did the broker say?

Citi notes that AMP is making progress but acknowledges that there’s still a long way to go for the company.

It commented: “While AMP has clearly made some progress in 1H21, there is still a long way to go. There will be no dividend until at least 1H22 and earnings are guided to fall in 2H. However given the 1H beat on higher “investment earnings” we nonetheless lift our FY21E by 3% with little change to later years.”

“As a new CEO takes the helm, it still remains unclear what shape AMP Capital will be in by the time of its targeted private capital markets demerger with its profit currently on a declining path. Further, while its remediation program is finished and there is progress in advice, there is still a long way to go to put the business on a profitable footing. Given slightly reduced, but still considerable, uncertainty we retain our Neutral/High Risk call and A$1.25 target price,” it added.

Finally, the team at Ord Minnett currently have a hold rating and $1.20 price target. Based on the current AMP share price, this implies potential upside of 10%.

The post What does the future look like for the AMP (ASX:AMP) share price? appeared first on The Motley Fool Australia.

More reading

• When was the best day ever on the AMP share price chart?
• The AMP (ASX:AMP) share price is down 28% so far in 2021. Here’s why
• August has been a good month for the AMP (ASX:AMP) share price
• Australia’s rising delta recession risk could hit these ASX 200 shares badly
• It’s been a good week so far for the AMP (ASX:AMP) share price

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) fought back again from an early decline to finish the day marginally higher. The benchmark index rose slightly to 7,530.3 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market is expected to fall on Wednesday. According to the latest SPI futures, the ASX 200 is expected to open the day 20 points or 0.3% lower this morning. This follows a disappointing night of trade on Wall Street, which saw the Dow Jones fall 0.75%, the S&P 500 drop 0.35%, and the Nasdaq edge 0.05% higher.

Macquarie shares given neutral rating

The Macquarie Group Ltd (ASX: MQG) share price could be fully valued according to analysts at Goldman Sachs. According to a note, the broker has retained its neutral rating but lifted its price target on the investment bank’s shares to $156.52. Goldman lifted its price target after revising its earnings estimates higher to reflect Macquarie’s recent AGM update and broader market conditions. However, it isn’t enough for a more positive rating due to valuation reasons.

Oil prices tumble

It could be a tough day for energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) after oil prices tumbled. According to Bloomberg, the WTI crude oil price is down 1.3% to US$68.38 a barrel and the Brent crude oil price is down 0.8% to US$71.63 a barrel. Oil prices fell on demand concerns.

Shares going ex-dividend

A number of ASX 200 shares are going ex-dividend today and could trade lower this morning. This includes health supplements company Blackmores Limited (ASX: BKL), supply chain logistics company Brambles Limited (ASX: BXB), private health insurer Medibank Private Ltd (ASX: MPL), and job listings giant SEEK Limited (ASX: SEK).

Gold price sinks

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) will be on watch on Wednesday after the gold price sank. According to CNBC, the spot gold price is down 2% to US$1,796.40 an ounce. A combination of a strong US dollar and higher yields took the shine off the precious metal.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

More reading

• ASX 200 flat, Aussie Broadband shares halted, Openpay rises
• Materials sector lagged the ASX 200 on Tuesday
• Here are the 3 most heavily traded ASX 200 shares today
• Here are the top 10 ASX 200 shares on Tuesday
• ASX 200 bounces back as RBA holds interest rates

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Macquarie Group Limited. The Motley Fool Australia has recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It was a relatively quiet day for the ASX. The S&P/ASX 200 Index (ASX: XJO) was essentially flat at 7,530 points.

Here are some of the highlights from the ASX:

Aussie Broadband Ltd (ASX: ABB)

The NBN-focused telco business announced today that its shares were going into a trading halt.

It said that that it’s in the process of making and finalising arrangements for a potential capital raising.

According to reporting by the Australian Financial Review, Aussie Broadband is looking to raise $120 million to accelerate product development and support new opportunities. It will be reportedly priced at $4 per share which represents a discount of 13.6%.

Openpay Group Ltd (ASX: OPY)

The Openpay share price rose around 4% today after the buy now, pay later company’s update on the latest partnerships that it has won.

It has signed partnerships with Goodyear and Dunlop Tyres Australia, with 450 tyre and auto service businesses including Beaurepaires, Goodyear Autocare and Dunlop Super Dealers.

Openpay also said that it has secured the status of being preferred buy now, pay later provider in partnership with the Victorian Automobile Chamber of Commerce (VACC) and Bosch Car Service Australia.

In its healthcare division, Openpay has signed an agreement with Nexus Hospitals.

It has also signed with Henry Schein UK, delivering an integration with software business Software of Excellence, which was described as a leader in providing dental practice management software and marketing solutions.

Openpay said that healthcare has also been launched in the UK with veterinary practices preparing to commence transacting with Openpay through the ezyVet integration.

The CEO and managing director of Openpay, Michael Eidel, said:

Openpay continues to establish partnerships with major ecosystem providers and aggregators in our target verticals across our key markets. With these new partnerships, we have deepened our focus into our core verticals in the UK, which together with the anticipated Payment Assist acquisition in Automotive and our imminent US launch, will set us up to achieve our long-term objectives of sustainable growth and profitability.

Biggest movers and shakers in the ASX 200

With a lack of actual announcements by ASX 200 companies, let’s look at some of the biggest movers.

At the green end of the ASX 200, three of the biggest gains were resources business Chalice Mining Ltd (ASX: CHN) which rose 6.3%, ASX travel share Flight Centre Travel Group Ltd (ASX: FLT) climbed 6.2% and cloud computing business Megaport Ltd (ASX: MP1) which rose 4.2%.

At the bottom of the ASX 200 performance table, the Appen Ltd (ASX: APX) share price fell 4.4% and the Regis Resources Limited (ASX: RRL) share price fell 4.6%.

The post ASX 200 flat, Aussie Broadband shares halted, Openpay rises appeared first on The Motley Fool Australia.

More reading

• Materials sector lagged the ASX 200 on Tuesday
• Here are the 3 most heavily traded ASX 200 shares today
• Here are the top 10 ASX 200 shares on Tuesday
• ASX 200 bounces back as RBA holds interest rates
• The CBA share price has struggled in the last month. Here’s why

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. owns shares of and has recommended Appen Ltd, Aussie Broadband Limited, and MEGAPORT FPO. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool Australia has recommended Aussie Broadband Limited, Flight Centre Travel Group Limited, and MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has had a bit of a topsy-turvy Tuesday today. While the ASX 200  finished the day up 0.024% at 7,530.30 pints, it was down as low as 7,488 points earlier in the day (0.5%).

Looking at the ASX 200 sectors that contributed and detracted to today’s ASX 200 performance, and one sector jumps out. That would be the ASX materials sector. Materials companies are generally those who dwell in the mining and drilling space.

So the S&P/ASX 200 Materials Index (ASX: XMJ) closed the day at 0.81%, vastly underperforming the broader ASX 200. It happened to be one of the worst-performing ASX sectors today, so investors can largely blame this corner of the ASX 200 for the losses this Tuesday has brought us.

So let’s look at how some major ASX materials shares are sailing today.

Some of the biggest ASX materials winners and losers on Tuesday

BHP Group Ltd (ASX: BHP) is the ASX’s largest materials company. It’s shares finished the day down 0.36% to $42.04 a share.

Another major constituent is Rio Tinto Limited (ASX: RIO). Rio shares were are also down today by 1.80%, trading at $108.70 a share.

Fortescue Metals Group Limited (ASX: FMG) is a real clanger today. Fortescue shares finished the day down 3.12%, and are sitting at $17.88.

But it’s not just the big iron ore diggers that are in the red today. Gold miners are also hurting. Newcrest Mining Ltd (ASX: NCM) shares finished the day down at 1.35% at $24.86. Its fellow gold miners Regis Resources Limited (ASX: RRL) and Ramelius Resources Limited (ASX: RMS) fared even worse. Regis lost a nasty 4.60% today to $2.28 a share, while Ramelius shares finished the day down 2.65% to $1.47.

A recent winner is also giving back some of its gains today. South32 Ltd (ASX: S32) shares have been on a bit of a tear in recent weeks. But today, this diversified miner slid by around 1.8% to $3.29 a share. Even so, South32 remains up more than 11% over the past month, so nothing too catastrophic there.

Another recent star performer in Alumina Limited (ASX: AWC) is doing something similar. It’s lost 1.94% today at $2.02 a share, but remains up by a very healthy 16% over the past month.

The rare ASX materials shares that are in the green today include Lynas Rare Earths Ltd (ASX: LYC) and Brickworks Limited (ASX: BKW). These companies finished the day up by 1.58% and 1.11% respectively. 

So ASX materials shares are certainly a drag on the ASX 200 today. But yet again, it wasn’t too long ago that this sector was repeatedly holding up the rest of the ASX 200. As they say, everyone eventually has their turn in the sun.

The post Materials Sector lagged the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares today
• Here are the top 10 ASX 200 shares on Tuesday
• ASX 200 bounces back as RBA holds interest rates
• The CBA share price has struggled in the last month. Here’s why
• Why the Rio Tinto (ASX:RIO) share price is in the red on Tuesday

Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has ended the trading day only slightly in the green. The ASX 200 closed at 7,530 points, up a paltry 0.02%.

But rather than dwelling on that uninspiring figure, let’s instead check out the heaviest trading ASX 200 shares this Tuesday.

The 3 most heavily traded ASX 200 shares today

Whitehaven Coal Ltd (ASX: WHC)

Our first ASX 200 share today is coal miner Whitehaven. This Tuesday has seen a sizeable 15.28 million Whitehaven shares change hands. There was no major news or announcements out of this company today. However, it has been enjoying some impressive share price gains which are probably behind so many shares trading.

Whitehaven shares were one of the ASX 200’s best performers this Tuesday, with the company even hitting a new 52-week high of $3.02 a share earlier this morning. Whitehaven shares finished the day at $2.98 apiece, up 3.11% on yesterday’s closing price.

Fortescue Metals Group Ltd (ASX: FMG)

Fortescue shares had the opposite experience to Whitehaven today. This ASX 200 iron ore giant saw a hefty 18.53 million of its shares bought and sold. However, this appeared to be a consequence of the company’s steep share price fall.

Fortescue shares ended the session at $17.99 a share, down 3.12% for the day. However, the company fell all the way down to $15.62 earlier this afternoon, a drop of roughly 4%. It’s this steep fall that is probably behind Fortescue’s heavy trading volume.

Pilbara Minerals Ltd (ASX: PLS)

Our final share today is none other than ASX 200 lithium producer Pilbara. A frequent guest on this list, Pilbara saw a whopping 19.22 million of its shares swap hands this Tuesday.

Unlike the other two shares here, Pilbara has had a day of indecisiveness from investors it seems. The Pilbara share price ended the day up 0.47% at $2.15 a share. However, it was as much as 1% higher today as well as being down by roughly 1% at another point. This ‘Goldilocks’ volatility is likely to be behind the large trading volumes we witnessed today.

The post Here are the 3 most heavily traded ASX 200 shares today appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares on Tuesday
• ASX 200 bounces back as RBA holds interest rates
• The CBA share price has struggled in the last month. Here’s why
• Why the Rio Tinto (ASX:RIO) share price is in the red on Tuesday
• 5 ASX shares under $10 that have more than doubled in the past year

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 Bruce Jackson.

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Today, the S&P/ASX 200 Index (ASX: XJO) went for a rollercoaster ride, ending the session just above breakeven. The benchmark index closed 0.02% higher to 7,530.3 points. Shares bounced back after the Reserve Bank of Australia held interest rates at their historic low of 0.10% this afternoon.

However, the question is: which shares from the top 200 delivered the most green on the ASX today? Here are the ten stocks that delivered the biggest gains while the market fell:

Top 10 ASX 200 shares countdown today

Looking at the top 200 listed companies, Chalice Mining Ltd (ASX: CHN) was the biggest gainer today. Shares in the mining company rallied 6.34% despite no news out. Find out more about Chalice Mining here.

The next best performing ASX share out of the top 200 today was Flight Centre Travel Group Ltd (ASX: FLT). The travel manager’s shares continued to charge higher, gaining 5.83% to $18.52. Uncover the latest Flight Centre information here.

Today’s top 10 biggest gains were made in these ASX 200 shares:

ASX-listed company	Share price	Price change
Chalice Mining Ltd (ASX: CHN)	$7.38	6.34%
Flight Centre Travel Group Ltd (ASX: FLT)	$18.52	5.83%
Technology One Ltd (ASX: TNE)	$11.215	4.62%
Megaport Ltd (ASX: MP1)	$17.99	4.17%
Eagers Automotive Ltd (ASX: APE)	$17.28	3.35%
Seek Ltd (ASX: SEK)	$33.99	3.34%
Whitehaven Coal Ltd (ASX: WHC)	$2.98	3.11%
Sealink Travel Group Ltd (ASX: SLK)	$8.99	3.10%
Pinnacle Investment Management Group Ltd (ASX: PNI)	$16.95	2.42%
Platinum Asset Management Ltd (ASX: PTM)	$3.84	2.40%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to ensure you know which companies were making the biggest moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

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

More reading

• ASX 200 bounces back as RBA holds interest rates
• The CBA share price has struggled in the last month. Here’s why
• Why the BHP (ASX:BHP) share price is slumping 1% today
• Why AnteoTech, BlueBet, Flight Centre, & Mosaic Brands are racing higher
• Which ASX 300 shares are making the biggest moves on Tuesday?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MEGAPORT FPO and PINNACLE FPO. The Motley Fool Australia owns shares of and has recommended PINNACLE FPO. The Motley Fool Australia has recommended Flight Centre Travel Group Limited, MEGAPORT FPO, and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Harvey Norman Holdings Limited (ASX: HVN) share price has been a strong performer over the last 12 months.

Since this time in 2020, the retail giant’s shares have rallied 22% higher.

Can the Harvey Norman share price keep climbing?

The good news is that one leading broker still believes the Harvey Norman share price can go higher from here.

According to a note out of Citi, its analysts have put a buy rating and $6.00 price target on the retailer’s shares.

Based on the current Harvey Norman share price of $5.21, this implies potential upside of 15% over the next 12 months.

And with the broker expecting a very generous dividend yield of 7% in FY 2022, this potential return stretches to 22%.

Citi’s forecasts

Citi is forecasting a full year profit of $482 million in FY 2022, with earnings per share coming it at 39 cents. Based on this the Harvey Norman share price is trading at a little over 13x forward earnings.

From these earnings, the broker expects a sizeable 37 cents per share dividend to be paid to shareholders.

What did Citi say?

It commented: “Harvey Norman delivered FY21 underlying PBT (ex-revaluations and pre-AASB16) of $1,034 million, up 67% YoY, ~6% ahead of Citi estimates. Harvey Norman’s underperformance in the July/August trading update is not representative of true underlying demand, in our view, given several distorting factors that skewed the result downward.”

“Key fundamental macro pillars that have underpinned Harvey Norman’s solid FY21 result remain despite lock down disruptions. Given the stock’s relatively undemanding valuation, we maintain our Buy rating with our target price unchanged at $6.00 per share,” it added.

The post Top broker tips Harvey Norman (ASX:HVN) share price as a buy appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• ASX 200 rises, Harvey Norman falls, Mesoblast sinks
• ASX reporting wrap-up: Harvey Norman, Cettire, PointsBet
• Why Bubs, Harvey Norman, Mesoblast, & Regis shares are dropping
• ASX 200 midday update: Harvey Norman’s record profit, PointsBet posts large loss

Motley Fool contributor James Mickleboro 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 Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Reserve Bank of Australia (RBA) has opted to keep interest rates at their historic low for a 10th consecutive month. The S&P/ASX 200 Index (ASX: XJO) edged into the green after the RBA made the announcement at its September meeting.

Following the news, the Australian benchmark index finished 0.02% higher to 7,530.3 points. The index had been as low as 7,487.8 points earlier in the day.

Let’s have a closer look at what was shared at the latest RBA meeting.

Economic bounce back

Refraining from increasing interest rates might appear negative on the surface. However, the central bank shared an optimistic perspective for the Australian economy. This coincided with the ASX 200 retracing upwards from its session lows.

In the meeting, Governor Philip Lowe outlined that the disruptions lockdowns have had on the economy are merely a “setback”.

Mr Lowe added that the Delta outbreak is expected to delay, but not derail, Australia’s economic recovery. Furthermore, the RBA is forecasting the economy to respond strongly as vaccination rates increase, leading to an easing of restrictions.

As a result, the central bank has decided to forge forth with its plan to taper quantitative easing (QE). This means the Reserve Bank will reduce its government bond-buying scheme to $4 billion per week, down from its previous $5 billion.

Demonstrating the balancing act being conducted, the RBA has kept interest rates at their all-time low of 0.10%. This is in light of the financial impact that will likely lead to a material reduction in gross domestic product for the September quarter — coinciding with an anticipated increase in the unemployment rate in the coming months.

Additionally, the central bank noted it would not consider reducing its level of weekly QE again until at least mid-February 2022. The combination of historically low interest rates and continued monetary intervention by the Reserve Bank appears to have left investors of the ASX 200 more optimistic this afternoon.

Looking back at the ASX 200

The S&P/ASX 200 Index has benefitted from a quick injection of monetary stimulus and intervention since the COVID crash. Consequently, the Australian index has broken multiple records over the course of the past 18 months. For instance, the ASX 200 has touched never-before-seen highs around the 7,600 point level.

Similarly, the index posted one of its largest gains in a financial year in history in FY21. Over the course of FY21, the ASX 200 surged a monumental 24%. Investors might be hoping for further gains given the continued economic support from the RBA.

The post ASX 200 bounces back as RBA holds interest rates appeared first on The Motley Fool Australia.

More reading

• The CBA share price has struggled in the last month. Here’s why
• Why the BHP (ASX:BHP) share price is slumping 1% today
• ASX 200 midday update: BHP & Fortescue fall, Flight Centre storms higher
• Transurban (ASX:TCL) share price could get boost from WestConnex rumour
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Mitchell Lawler 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 Bruce Jackson.

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