Futures trading pointed to a softer start to Thursday. However, the ASX 200 benchmark index was up 1% to 7,035, while the wider All Ordinaries index had also increased 1% to 7,323 at 10:40 AM AEDT.

Beach Energy (+7.8pc), Virgin Money (7.5pc), Pointsbet (6.2pc), Liontown Resources (+6.2pc), and South32 (+5.8pc) were the top-rising stocks.

Silver Lake Resources (-6.8pc), Evolution Mining (6pc), Ramelius Resources (3pc), Northern Star Resources (3pc), and Xero (2pc) were the biggest drags on top 200 company index.

A number of trading updates were also posted this morning. Kogan stock fell 14 percent after the company posted a 9% increase in total gross sale but a 4.4% decrease in gross profit.

According to the online retailer, supply chain problems continue to affect its profit margins.

Premier Investments saw a 5.4% increase in its share after it announced that it expects higher-than-forecast earnings (EBIT), in the first half, due to rising global sales.

The landlord refused to reduce rent, so the company announced that it will close four shops in Mid-City Arcade, Sydney CBD.

BHP shares rose 2.9% after the announcement that a United Kingdom court had approved the listing unification plan. This would allow the miner to be listed only in Australia and leave the FTSE 100 index.

The Australian dollar dropped to a seven-week low overnight and was trading at 71.9 US cents as of 10:53 AM AEDT.

Wall Street is down

Wall Street trading started strong, but major indices closed slightly lower after investors reacted to US central bank’s rate-setting commission’s announcement that the flow of cheap money through the economy might be ending soon.

After being up by more than 2 percent earlier in the session the benchmark S&P 500 fell 0.2% to 4,349, while the blue-chip Dow Jones index lost 0.4% to 34,168, and the Nasdaq Composite closed unchanged at 13,542.

The benchmark index was supported by banks and energy.

Microsoft saw a 2 percent increase in earnings due to strong quarterly results.

Boeing lost 4.7 per cent after reporting mixed results.

A US rate increase could be imminent

The Federal Reserve’s rate-setting panel met for two days and the central bank indicated that it will likely raise US interest rates in March to combat inflation.

An increase in the rate would be a crucial step to reverse the low-rate policies of the pandemic-era that have fueled growth and employment but also exacerbated inflation.

“With inflation well over 2 percent and a strong labor market, the committee expects that it will soon be appropriate for them to raise the target range of the federal funds rate,” said the Fed’s Federal Open Market Committee in a statement.

The US saw inflation rise by 7 percent in 2021, which is the highest increase since 1982.

Tapas Strickland, NAB director for economics, stated that Jerome Powell, Federal Reserve chairman, made three comments that suggested an aggressive rate-hike cycle. These included that asset prices were slightly elevated and that inflation was persistent.

Jerome Powell, Federal Reserve Chairman, also stated that he believes there is a lot of room for interest rates to be raised without threatening the labor market.

Edward Moya, OANDA’s senior market analyst, stated that the Federal Reserve would attempt to convince markets it has a plan to combat inflation, but not too aggressive to paralyze markets or create an environment of de-risking.

He stated that “The Fed could raise rates at every other meetings, with the balance sheets runoff beginning in May or June.”

“The main takeaway is that both mandates call for the end of accommodation. Powell was more hawkish the more he spoke during the Q andA session.

The Federal Reserve’s moves will increase pressure on the Reserve Bank of Australia this year to raise rates domestically.

Many banks anticipate the RBA will raise rates in August. However, some analysts believe that a move could be made as soon as May.

Commodities rise

Brent crude oil, an international benchmark for oil, reached $US90 Wednesday, the highest level in seven years.

Brent rose 1.7 percent to $US89.75 a barrel, while West Texas crude was unaffected at $US87.35 a barrel.

Spot gold was steady at $US1,829.70 an ounce.

Iron ore saw a 0.2 percent increase in overnight prices, reaching $US138.10 per ton.

European stocks closed higher after investors followed the US market’s earlier gains. However, indices closed prior to the Wall Street sell-off.

The pan-European STOXX 600 index ended 1.7% higher. Germany’s DAX rose 2.2 percent, and Britain’s FTSE gained 1.3 percent.