Tech stocks led the local market higher today, with the ASX 200 ending the session up 44 points, or 0.5%, to 7,975 points.
Tech stocks added 1.5%, while Healthcare and Industrials also outperformed.
The Energy sector, however, lost 1.9% as it was dragged lower by Woodside Energy. The oil giant lost 3.8% as it released its second-quarter report, a day after making a US$900 million ($1.3 billion) bid for a massive North American LNG development.
This would make WDS one of the world’s biggest LNG players, ahead of a potential increased support for the fossil fuel under a Trump administration.
However, Woodside has also detailed a $US500 million (A$753 million) increase in the cost of its Scarborough LNG project in WA, raising the total development cost to US$12.5 billion from the previous US$12 billion estimate.
This marks a 4% increase, with Woodside's share of the operation being US$8.2 billion. This cost rise was due to "scope maturation" of the Pluto Train 1 project, which is designed to take gas from the offshore Scarborough field and process it for export.
Analysts predict further budget pressures as Woodside aims to bring the project online by 2026. The cost hike underscores the challenges facing large-scale energy projects amid evolving project scopes and market conditions.
Deutsche expects inflation to remain elevated
Deutsche Bank says cracks are emerging in the RBA's stance that inflation expectations "remain consistent with the inflation target”.
Deutsche chief economist Phil Odonaghoe said, "Headline inflation has been above the RBA's 2-3% target range every quarter since Q2-2021 and on the RBA's forecasts, it is expected to remain there until Q4-2025: four and half years in total.”
"Against that backdrop, cracks in inflation expectations are starting to emerge.” He noted that trust in the RBA's inflation target has "never been this low for this long".
Deutsche Bank, along with five other financial forecasters, predicts that the RBA will raise the cash rate by 25 basis points at its August meeting, in response to stronger-than-expected inflation in the first half of 2024.
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