ASX Large Caps: Shares rally worldwide after Fedspeak, ASX Tech surges 3pc today

• Shares in Asia rose after Fed comments, ASX 200 was up 0.2%
• The ASX tech sector gained over 3%
• ECB rate decision ahead

Major stock exchanges around the world rallied after Fed Jerome Powell’s comments sparked a buying spree on risky assets.

At home, the ASX rose slightly by 0.15%, extending its gains in 2023 to 8.15%.

Overnight, the Fed increased its rate by 25bp as expected, but markets only rallied soon after Powell took the podium to front the press.

In his speech, Powell attempted to sound hawkish to talk the market out of bullishness, but instead ended up triggering another rally.

Bill Zox, Portfolio Manager at Brandywine Global said, “I see no signs yet that the Fed is open to 2023 rate cuts.

“I’m not sure the Fed is even trying for a soft landing. While they would never say so, they might prefer the restorative aspects of a recession and a proper bear market.”

Local investors’ eyes will now turn to the RBA, who will decide on Australia’s cash rate on February 7th.

The market expects RBA to hike by 25bp, despite sluggish retail figures and falling house prices.

On the ASX today, the Tech sector surged by over 3% on expectations of a more dovish central bank policy.

Sector leaders Xero (ASX:XRO), Wisetech (ASX:WTC) and Seek (ASX:SEK) rose by over 6% each.

“There’s a sense that things are actually better than the Fed is admitting to, in order to stop over-exuberance of the markets” said Nigel Green of deVere Group.

“Savvy investors know that now – in a year in which there will be big winners and big losers – it’s about being invested in the right companies, those which can consistently maintain or steadily grow margin, as well as diversification across sectors, asset classes and regions.”

Energy stocks meanwhile fell the most as Opec+ stuck to their oil output policy after a brief virtual meeting that lasted less than 30 minutes.

The cartel has decided to maintain a 2 million bpd cut agreed in October, and did not even discuss the possibility of increased demand from China.

One of the best large cap performers today was CSL (ASX:CSL)which was up 1% and touched a 52-week high on no specific news.

Looking ahead to tonight’s session on Wall Street, we can expect the ECB interest rates decision, the US initial jobless claim, and US factory orders.

BIG CAP WINNERS

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WAM Capital (ASX:WAM) surged almost 10% as it announced another large dividend for the first half.

The LIC’s dividend was declared at 7.75 cents per share on the back of gross portfolio return of 8.1% in the half.

BIG CAP LOSERS

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Pinnacle Investments (ASX:PNI) fell 6% after an earnings miss. PNI’s NPAT for the half was $30.5 million, down 24% on the pcp.