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Midday Market Update: S&P/ASX 200 Retreats Slightly Amid CPI News
The S&P/ASX 200 index is currently down 17 points, or 0.20%, as lunchtime approaches. Contrary to initial predictions of a gloomy session, the market experienced a rebound following a less alarming Consumer Price Index (CPI) report. Initially, the day began with a mixed outlook, dominated positively by sectors such as Utilities, Technology and Energy, while Materials faced a decline exceeding 1.5%. However, as the day progressed, most sectors turned positive, allowing Materials to recover some of their earlier losses.
Key Highlights
Market Performance at Midday
As of 12:36 PM AEST (source: Market Index):
- The ASX 200 has regained ground, albeit still in the red.
Today’s Major Story: Australian CPI Rises
The March CPI figure unveiled the highest inflation level since September 2023, primarily influenced by an unprecedented rise in automotive fuel prices, though core inflation indicators suggest steadiness.
- Headline CPI increased by 4.6% year-on-year, lower than the 4.8% estimate.
- Monthly CPI rose 1.1%, slightly below the anticipated 1.3%.
- Trimmed Mean CPI rose 3.3% year-on-year, aligning with forecasts.
- Transport sector was the most significant contributor to the monthly rise, experiencing a 9.2% increase, with automotive fuel prices soaring by 32.8%—the highest monthly increment since reporting began in 2017.
- Fuel prices saw regular unleaded rise by 33% (averaging 228 cents per litre) and diesel by 41% (averaging 256 cents).
- Housing costs saw a substantial annual rise of 6.5%.
- Electricity costs surged by 25.4% year-on-year due to the conclusion of government rebates.
Despite the trimmed mean figures being slightly under RBA’s projections, expectations remain for a potential rate hike at next week’s meeting, with futures indicating an approximately 80% chance of a 25 basis point increase.
Noteworthy Announcements
- Codan (CDA): Has upgraded FY26 guidance amid robust performance across divisions.
- G8 Education (GEM): Reports a significant decline in occupancy, prompting a restructuring initiative.
- oOh!media (OML): Received a takeover bid from PEP, valuing the company at a 65% premium over its recent close.
Capital Raisings
- Gold Mountain (GMN): Successfully raised $5.5 million for Brazilian exploration.
- Meteoric Resources (MEI): Finalized a $40 million placement.
- Syntara (SNT): Completed an $8 million placement and a share purchase plan.
Market Insights: Codan’s Performance
Codan has demonstrated exceptional growth, now enjoying a notable uplift following the upgrade to its FY26 guidance. Despite classification within the Tech sector, Codan primarily operates as a hardware manufacturer focusing on communications and metal detection.
Highlights from Codan’s Guidance:
- FY26 NPAT projection of approximately $170 million, surpassing prior estimates of $152.5 million—an 11% beat, signalling a year-on-year growth of about 64%.
- Communications revenue growth is now expected at the upper end of the 15-20% target range for FY26.
- Profit margins in the communications segment are anticipated to reach 30% for FY26, surpassing earlier targets.
- Minelab revenue is on a promising trajectory in H2, fuelled by recent product launches and favourable gold prices.
Codan’s stock surged by 17%, reaching unprecedented highs, suggesting potential target price upgrades from brokers in the coming days.
Intraday Movers: Winners and Losers
Top Gainers
| Ticker | Company | Change | Current Price |
|---|---|---|---|
| CDA | Codan | +9.08% | $42.65 |
| NIC | Nickel Industries | +5.25% | $1.04 |
| YAL | Yancoal Australia | +4.70% | $7.69 |
Top Losers
| Ticker | Company | Change | Current Price |
|---|---|---|---|
| 4DX | 4DMedical | -6.60% | $4.39 |
| LIN | Lindian Resources | -2.71% | $0.83 |
| MCY | Mercury | -2.69% | $5.43 |
Broker Updates
- Life360 Inc: Price target maintained.
- Aurelia Metals: Multiple brokerage upgrades with varied target price outlooks.
- Beach Energy: Retained at ‘buy’ with adjusted price targets.
- Technology One and Whitehaven Coal: Target prices adjusted among major brokerages.
The current snapshot of the ASX shows a detailed response to today’s events, focusing not only on CPI impacts but also on significant market movements across sectors. Investors remain watchful ahead of anticipated adjustments from the RBA.
