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ASX Stock Market Recap February 2024

The stage is set for the Reserve Bank of Australia (RBA) to announce an interest rate cut, which will greatly impact banking, mortgages, and investments. This was felt from January to February 2024, with a steady return to retail spending, and crucial Reserve Bank decisions.

Investor confidence in potential looming rate cuts led to some interesting developments on the ASX. Against this backdrop, there were significant gains for tech, real estate, and bank stocks. Get the highlights in this ASX stock market recap for February 2024.

Key Points

Market Overview

With consumers curbing non-essential spending after November’s Black Friday sales, retail sales fell by 2.1% in December.

The 2nd of February saw the S&P/ASX 200 hit a record intraday high of 7703.6 points, with the market closing at a record high of 7699.4 points. This was strongly influenced by gains on bets that the Australian Reserve Bank would cut rates later this year. 

Good news followed the Reserve Bank’s February meeting, with the RBA announcing it will keep the cash rate at 4.35 %  and reduce its tightening bias on the cash rate outlook. Experts believe that Australia will see a much-anticipated rate cut later this year, or early 2025. This confidence saw gains for interest rate-sensitive banks, technology, and real-estate stocks. Retail made a strong recovery since December’s sharp drop. Turnover in January showed an increase of 1.1%. This was less than market analysts anticipated, but February levels were similar to those in September 2023.

Relevant News

2024 has been off to an exciting start on the ASX. Retail sales were low in December, which is always expected after the consumer remorse and necessary budget tightening after Black Friday sales. However, retail turnover made a slight comeback in January. By February, it compared with September last year.

Hot on the heels of Wall Street gains following Amazon, Apple, and Facebook’s Meta posted results, the ASX 200 closed at a record high. 

 

Another contributing factor was investor confidence in stocks sensitive to interest rates. The Australian Reserve Bank’s decision to maintain the cash rate and reduce its tightening bias, while revising down CPI and GDP forecasts, led experts to believe that the interest rate cut everyone is waiting for is imminent.

Conclusion

Although January did not bring as much recovery to the retail sector as expected with only a 1.1% increase in turnover after December’s 2.1% slump, by February it was similar to levels seen in September 2023. 

Tech stocks performed well, leading to gains on Wall Street, followed by a record-high closing on the ASX 200. And after the Reserve Bank’s announcement that it will keep the cash rate at 4.35%, reduce bias tightening, and revise down CPI and GDP forecasts, investors are anticipating its next move. 

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