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The Australian share market tumbled yesterday, closing the trading session 1.5% in the red, after the RBA raised the cash rate yesterday, increasing the velocity of higher borrowing costs. In its June meeting yesterday, the RBA raised the cash rate by 50 basis points to 0.85%, which is the largest lift in 22 years – the last time it was raised this much was in February 2000. It is also the first time since 2010 that the cash rate has been raised for the second month in a row. So, the market negatively reacted to the rate hike, and had its worst day in almost 3 weeks. All industry sectors declined, with tech and real estate falling the most, both sectors are sensitive to interest rates.

Taking a closer look at the ASX200, the stocks that managed to make gains yesterday included Sandfire Resources (ASX:SFR), Inghams Group (ASX:ING) and Ampol (ASX:ALD), while the stocks that declined the most were BNPL company Zip (ASX:ZIP) and Clinuvel Pharmaceuticals (ASX:CUV).

The most traded stocks by Bell Direct clients yesterday were Australia & New Zealand Bank (ASX:ANZ), Lake Resources (ASX:LKE), Westpac (ASX:WBC), National Australia Bank (ASX:NAB) and Commonwealth Bank (ASX:CBA).

European stocks closed slightly lower amid inflation concerns, however over in the US it was a positive session, with all three major benchmarks closing higher. The Dow up 0.8%, the S&P500 up 0.95% and the Nasdaq up 0.9%.

What to watch today:

• The Australian market is set to regain some of yesterday’s losses and follow Wall Street’s lead. The SPI futures are suggesting the ASX200 will rise 0.63% at the open this morning.
• In commodities:
  • Oil is trading higher and crude futures are nearing 14-year highs, after OPEC decided to raise output for July and August.
  • The gold price is also higher, as gold is often viewed as a safe-haven metal by investors in a risk-adverse environment, and concerns continue around slowing global growth and inflation.
  • Iron ore has also rallied, with seaborne iron ore trading around US$145 a tonne.
• As for economic data to watch out for today, at 11:30am AEST, NAB’s business confidence data for May will be released, which will give us an indication of sentiment across all industry sectors. And confidence is forecast to rise from last month.
• Also today, watch Southern Palladium Limited (ASX:SPD) which lists on the ASX today.

Trading Ideas:

• Bell Potter have upgraded their rating on PWR Holdings (ASX:PWH) from a Hold to a Buy and have lowered their price target from $10 to $9.25. At its current share price of $7.21, this implies 28.3% share price growth in a year.
• And Trading Central have identified a bearish signal in Harvey Norman (ASX:HVN), indicating that the stock price may fall from the close of $4.26 to the range of $3.93 to $3.99 over 13 days, according to the standard principles of technical analysis.