ASX dips before blockbuster US Federal Reserve meeting

The Australian sharemarket dipped slightly on Wednesday after a day of narrow, choppy trading, as investors held back before the closely watched US Federal Reserve meeting and press conference booked for 5am on Thursday (AEDT).

The benchmark ASX 200 slipped 0.1 per cent, or 7.4 points, to end the day at 7695.80, while the broader All Ordinaries index dipped 0.04 per cent to end at 7954.5.

Australia’s technology stocks also dipped 0.04 per cent, or 1.1 points, to end at 3055.

The Aussie dollar dipped against the Greenback, trading 0.05 per cent lower at US65.2c.

Capital.com senior financial market analyst Kyle Rodda said Wednesday’s “range-bound” trading reflected investor caution and mirrored the performance of Asian and US futures markets.

“There wasn’t much follow through from the rally we got after the RBA yesterday, which is tied to a loss of momentum in equities heading into the Fed tomorrow,” he said.

“It’s similar to what we are seeing in futures and in the Asian region, fairly flat trading in the last half session or so.”

“We are not really seeing any major movements.

“The general consensus at the moment, or at least the market is leading that way, is the Fed will revive higher its interest rate projections for 2024.

“The markets are almost there in pricing that in though, so that in and of itself might not be so earth-shattering.

“So then we turn our interest to the press conference tomorrow and we are going to be gauging the language, (US Federal Reserve chairman Jerome) Powell’s language, about when rates might be expected to be cut and perhaps how deeply as well.”

The bourse rose in early trading but gave up its gains in the afternoon.

Australia’s big miners added to Tuesday’s materials rally, with BHP, Rio Tinto and Fortescue up 0.5 per cent, 0.76 per cent and 0.86 per cent respectively, but the lift wasn’t enough to carry the broader materials sector into the green.

Eight of 11 industry sectors ended in the red, with only energy, telecommunications and discretionary booking gains for the day, but all sectors recorded only small gains or losses.

Energy rallied in early trading but trimmed its gains to end the day with a 0.6 per cent bump, while IT fell the most with a 0.49 per cent decline.

Energy giant Woodside Petroleum rose 0.26 per cent to close at $30.33 a share, while Santos traded flat after an early rise, closing at $7.49 a share.

Thermal coal stocks New Hope Corporation and Whitehaven extended their gains from Tuesday, with New Hope rising 1.74 per cent to close at $4.68 a share and Whitehaven jumping 2.66 per cent to finish at $6.57 a share.

In corporate news, miner South32 fell 4.17 per cent after the company announced a suspension of its manganese operations at the Groote Eylandt mine in the Northern Territory due to the impact of Tropical Cyclone Megan.

The company is confronting flooding in its mine pits and “significant damage” to critical haul road infrastructure.

Seven West Media continued its troubled 2024, shedding 5 per cent to close at 19c.

Paladin Energy scored the biggest gain in the ASX 200, flying 5.6 per cent higher to close at $1.32, while the benchmark’s top laggard was Red 5 Limited, which dropped 4.28 per cent to end the day at 33.5c.