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RBA speech boosts market, Link deal set to proceed

Daily Market Update

The Australian sharemarket surged in the afternoon, gaining more than 1.6 per cent after the Reserve Bank Governor flagged a more cautious approach to future rate rises. Every sector finished the day higher and significantly so with the technology sector gaining 2.8 per cent as bond yields fell. The top performers were Life360 (ASX:360), Megaport (ASX:MP1) and Link (ASX:LNK) were finished 15.3, 11.9 and 6.4 per cent higher respectively. The materials and property sector both gained 2.5 per cent while the retail sector added 2.3 on hopes that rate rises may be put on hold. Governor Phillip Lowe flagged the fact that rate rises can take some time to filter through the economy, and that the faster interest rates have risen the more likely they were to slow future hikes. Shares in Link gained more than 6 per cent after the ACCC all but approved the takeover by Dye & Durham on the condition that they divest their existing Australian business on competition concerns.   

Grain monopoly questioned, Tyro takeover offer rejected, trade surplus falls

Shares in GrainCorp (ASX:GNC) gained 2.8 per cent after the ACCC released a report suggesting the bulk grain export industry generally supported greater regulation. However, port terminal operators naturally do not, with exports concerned about a lake of transparency into the way ports allocate capacity. The trade surplus narrowed to $8.7 billion with economists more than 50 per cent off the mark, predicting a surplus of $14.5 billion. The key driver was a 9.9 per cent fall in exports, likely due to falling commodity prices and a 5.2 per cent increase in imports. Tyro Payments (ASX:TYR) which has struggled in light of the selloff in technology shares and a higher competitive payments sector surged more than 28 per cent. The company confirmed they had rejected a takeover offer valuing the company at $658 million from a consortium led by private equity firm Potentia Capital. Large shareholder Mike Cannon-Brookes has already agreed to sell his stake in the business. 

Global shares strengthen, Snap jumps, 4 per cent rates on the cards

The US market continued to push higher overnight despite continued action on interest rates and commentary suggesting the Fed could go as high as 4 per cent. The Nasdaq and Dow Jones both gained 0.6 per cent and the S&P500 0.7 per cent as inflation expectations fell and jobless claims remained near record lows. Both the Bank of Canada and European Central Bank delivered 75 basis point rate hikes with the same expected in the US, something that is likely to cap market movements until more clarity on the outlook for inflation filters through. Shares in social messaging platform Snap Inc. (NYSE:SNAP) gained more than 9 per cent following a speech from CEO Evan Spiegel, who announced he would be cutting 20 per cent of the work force and plans to grow the company into a US$6 billion revenue business. Rivian (NYSE:RIVN) shares gained more than 10 per cent after announcing a partnership with Mercedes to build electric vans in Europe. Queen Elizabeth II passed away at 96 years of age. 

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