The furniture retailer’s shares are not sitting too comfortably on Tuesday.
The post Why did the Temple & Webster share price plunge 10% today? appeared first on The Motley Fool Australia. –
The Temple & Webster Group Ltd (ASX: TPW) share price had a tough day today.
The company’s share price dropped 10.42% to $3.87. For perspective, the S&P/ASX 200 Index (ASX: XJO) fell 1.53% today.
So what impacted the Temple & Webster share price today?
RBA rate decision
The Temple & Webster share price finished the day well in the red, but it was not the only ASX retail share to drop.
Temple & Webster shares fell in the lead up to and following the Reserve Bank of Australia (RBA) lifting interest rates this afternoon.
The RBA lifted the benchmark interest rate by 0.5 percentage points today to curb inflation, as my Foolish colleague Bernd reported. The cash rate now sits at 0.85%.
A rate hike was widely predicted. Goldman Sachs predicted the 0.50% jump, while other analysts predicted more modest increases of between 0.25 and 0.4%.
Interest rate rises can impact retail shares due to rising costs and consumers having less spare cash to spend on retail including furniture and homewares.
Reserve Bank Governor Philip Lowe said: “Inflation in Australia has increased significantly. While inflation is lower than in most other advanced economies, it is higher than earlier expected.”
City Index senior market analyst Matt Simpson said the rate hike was the first 50 basis point (bps) rise since February 2000. He added:
That’s also 75-bps over the past two meetings, which makes it their most aggressive back to back meeting on record.
I really think the RBA have restored some credibility today by coming out swinging.
Multiple brokers have recently rated the Temple & Webster share price as a buy, including Credit Suisse, UBS, and Morgan Stanley.
In a recent update, the company launched a new online business named The Build with 20,000 products in 39 categories.
Temple & Webster share price snapshot
The Temple & Webster share price has fallen 64% in the past year, and by a similar amount in the year to date. It’s also down 12% over the past month and 17% in a week.
For perspective, the S&P/ASX 200 Index (ASX: XJO) has lost nearly 3% in the past year.
The post Why did the Temple & Webster share price plunge 10% today? appeared first on The Motley Fool Australia.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
*Returns as of January 12th 2022
Do experts think the Temple & Webster share price is a massive opportunity?
Expert reveals what to do with 4 ASX shares in trouble
Here’s why I think these 2 ASX growth shares are top buys in May
Could now be a great time to start investing in ASX shares?
Why I think the Temple & Webster share price is in the buy zone right now
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.