Stocks mixed as rate hike fears rise, China cuts LPR

Shares of Australian cement maker Adbri plunged after posting a 15% decline in net profit for the first six months of the year compared to the same period a year ago.

Adbri’s stock dropped more than 16.54% on Monday.

Net profit stood at 48.1 million Australian dollars ($33.2 million), while first half revenue increased 8% year-on-year to $812.4 million Australian dollars. It was “driven primarily by strong construction and mining sector demand and improved pricing across most products,” the company said in a report.

Underlying net profit after tax was hit in part by operational challenges related to extreme wet weather events on the east coast of Australia and higher costs, the company said.

— Abigail Ng

Policymakers in New Zealand want interest rates to be “comfortably above neutral” to fight rising prices, Reserve Bank of New Zealand Deputy Governor Christian Hawkesby said, according to Reuters.

The RBNZ raised its cash rate by 50 basis points to 3% last week. Hawkesby told Reuters the central bank considered 25 or 75 basis point hikes.

He said taking the official cash rate above neutral would bring down inflation and “afford us some breathing space to see how things are playing out.”

“Once we get the [official cash rate] up into that 4%-4.25% level we’re seeing things evenly balanced from there. So we’d put equal weight on having to put the OCR up as we would putting it down,” he added.

Hawkesby said policymakers are expecting the economy to cool and acknowledge that uncertainties lie ahead.

— Abigail Ng

The International Monetary Fund will visit Colombo this week to continue discussions with Sri Lankan authorities on economic and financial reforms and policies.

“The objective is to make progress towards reaching a staff-level agreement on a prospective IMF Extended Fund Facility (EFF) arrangement in the near term,” the IMF said in a statement on the weekend.

“Because Sri Lanka’s public debt is assessed as unsustainable, approval by the IMF Executive Board of the EFF program would require adequate assurances by Sri Lanka’s creditors that debt sustainability will be restored.”

The IMF had already concluded a first-round discussion in late June when it worked on a macroeconomic and structural policy package with Colombo “to correct macroeconomic imbalances, restore public debt sustainability, and realize Sri Lanka’s growth potential.”

Other challenges that need to be resolved include containing rising levels of inflation and addressing the severe balance of payments pressures.

The EEF is the IMF’s lending facility and helps countries deal with balance of payments, or cashflow, problems.

— Su-Lin Tan

Stocks have been volatile this year, as a mix of recession fears, inflationary pressure and other macro risks roil markets.

Here are three ways that investors can adjust their portfolios to lower their risks or mitigate losses, according to Goldman Sachs, Wells Fargo…