Market Wraps

Evening Wrap: ASX 200 bounces + BHP's seasonal share price performance

Thu 18 May 23, 4:57pm (AEST)

 The S&P/ASX 200 closed 38 points higher, up 0.52%. 

The market bounced after a strong lead from Wall St, the ASX 200 Tech Index hits a one-year high, Australia's unemployment rate unexpectedly ticks up, a few UBS notes on recent company earnings and what does the average year look like for BHP?

Let's dive in.


Today in Review

Thu 18 May 23, 4:27pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,236.8 +0.52%
All Ords 7,426.9 +0.51%
Small Ords 2,877.1 +0.36%
All Tech 2,296.7 +1.44%
Emerging Companies 2,079.5 +0.61%
Currency
AUD/USD 0.6646 -0.20%
US Futures
S&P 500 $4,167.75 -0.09%
Dow Jones $33,431.0 -0.14%
Nasdaq $13,636.5 -0.05%
Name Value % Chg
Sector
Information Technology 1,659.3 +2.91%
Materials 18,054.6 +1.19%
Energy 10,773.8 +0.88%
Financials 6,092.1 +0.66%
Utilities 8,581.0 +0.52%
Industrials 6,891.7 +0.32%
Consumer Staples 13,259.4 +0.13%
Communication Services 1,550.6 -0.28%
Consumer Discretionary 3,054.0 -0.31%
Health Care 44,268.2 -0.35%
Real Estate 3,153.3 -0.38%

Enjoying the Evening Wrap? Sign up to get it sent directly to your inbox after every trading day.

ASX 200 Session Chart

ASX 200 intraday
ASX 200 higher but closed off session highs (Source: Market Index)

Markets

The market continues to coil sideways with a slight bearish lean, given the two declines on Tuesday and Wednesday. Still, we're bouncing where we need to, which makes all the more awkward and indecisive. Technology remains the place to be, with the S&P/ASX 200 Tech Index rallying to a one-year high. Materials were also bid up amid a bounce for commodities including copper, iron ore and oil.

Economy

Australia’s unemployment rate increased to 3.7% in April from 3.5% in the previous month.

  • Employment dropped around 4,300 people and the number of unemployed increased by 18,000 people

  • “Even with these falls, both indicators were still well above pre-COVID-19 pandemic levels and close to their historical highs in 2022.” – Bjorn Jarvis, ABS Head of Labour Statistics

  • “In trend terms, the strong growth in hours worked, the high employment-to-population ratio and participation rate, along with the low unemployment and underemployment rates, all still point to a tight labour market.”


Latest news


Market Insights: BHP Seasonality

The below chart demonstrates what the average year looks like for BHP, based on historical share price performance between May 2003 and May 2023. As the historical data suggests, the stock tends to experience a sharp pullback in March and choppy price action between April and October.

In terms of upside, it tends to see a sharp rally from mid-March to early April and a strong rally from late November onwards.

For context, Thursday 18 May is day 138.

BHP seasonality x
BHP seasonality from 2003 to 2023 (Source: Market Index)

Interesting news and movers

Trading higher

  • +52.6% Terramin (TZN) – Granted mining permit

  • +33.3% Immutep (IMM) – Phase II trials

  • +14.2% Nufarm (NUF) – Earnings

  • +13.0% Queensland Pacific Metals (QPM) – Government grant

  • +9.9% Australian Agricultural Co (AAC) – Earnings

  • +8.9% Xero (XRO) – Earnings

  • +6.7% Temple & Webster (TPW) – Continuation rally, up 17% in last three

  • +4.2% Australian Strategic Materials (ASM) – Awarded government grant

  • +1.0% Nuix (NXL) – Investigating CEO share purchase 

Trading lower

  • -4.3% Beach Energy (BPT) – Withdraws capital estimates

  • -3.7% Frontier Digital Ventures (FDV) – Continuation losses

  • -3.1% Aristocrat Leisure (ALL) – Earnings


Broker notes

UBS notes:

Incitec Pivot (IPL): Buy with $3.40 target price

  • “IPL delivered 1H23 EBIT of A$552mn, down -3% vs. pcp which was -7% below UBSe but a -19% miss vs. a stale set of consensus expectations.”

  • “We retain our Buy rating with the stock now trading at a FY24 P/E of 12x which is a 15% discount to the 10yr ave.”

James Hardie (JHX): Buy with $46.50 target price

  • “JHX's updated LTI targets in the 2023 Annual Report reinforce comments made at the FY23 Result.”

  • “Our valuation remains unchanged. We have reduced our FY26 EPS marginally to reflect a slower European margin recovery and to sit within the LTI targets.”

Super Retail Group (SUL): Neutral with $13.25 target price

  • “SUL hosted a well attended Investor Day in Sydney with presentations from brand MDs and senior management.”

  • “Gross margins have risen due to pricing analytics, range optimisation and exclusive products, yet promotional intensity is rising in BCF eroding the uplift vs pre COVID.”

The Lottery Corp (TLC): Buy with $5.95 target price

  • “Based on year-to-date lottery results (representing ~90% of lottery turnover), we estimate 2H23E lottery revenue is tracking 22% lower than at the same point in time in 2H22.”

  • “If that gap is maintained for the final ~6 weeks of the year, we estimate 2H23E lottery revenue would be ~17% down on pcp for these products.”

  • “We now see downside risk to consensus expectations for FY23E, but it should be considered a low multiple impact.”

  • “We still believe in strong earnings growth and cash flow generation from FY24E and beyond driven by population, wage inflation, price increases, and continued digital channel migration.”


Scans

Top Gainers

Code Company Last % Chg
TZN Terramin Australi... $0.029 +52.63%
LER Leaf Resources Ltd $0.015 +36.36%
IMM Immutep Ltd $0.36 +33.33%
KNG Kingsland Mineral... $0.26 +30.00%
NUC Nuchev Ltd $0.26 +30.00%
View all top gainers

Top Fallers

Code Company Last % Chg
NME NEX Metals Explor... $0.014 -17.65%
LDR Lode Resources Ltd $0.24 -17.24%
PHL Propell Holdings Ltd $0.025 -16.67%
AUA Audeara Ltd $0.042 -16.00%
1AG Alterra Ltd $0.011 -15.39%
View all top fallers

52 Week Highs

Code Company Last % Chg
KNG Kingsland Mineral... $0.26 +30.00%
WC8 Wildcat Resources... $0.059 +20.41%
TLM Talisman Mining Ltd $0.21 +13.51%
XRO Xero Ltd $102.10 +8.50%
CTT Cettire Ltd $2.18 +7.92%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
NME NEX Metals Explor... $0.014 -17.65%
PHL Propell Holdings Ltd $0.025 -16.67%
AUA Audeara Ltd $0.042 -16.00%
1AG Alterra Ltd $0.011 -15.39%
GAP Gale Pacific Ltd $0.205 -14.58%
View all 52 week lows

Near Highs

Code Company Last % Chg
USD Betashares U.S. D... $14.80 -0.20%
CSL CSL Ltd $302.82 -0.46%
KAU Kaiser Reef Ltd $0.215 -4.44%
WVOL Ishares Edge MSCI... $36.43 -0.19%
PMGOLD Gold Corporation $29.71 -0.64%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
RXM REX Minerals Ltd $0.23 +2.22%
NXS Next Science Ltd $0.53 0.00%
PNV Polynovo Ltd $1.345 +1.13%
EMD Emyria Ltd $0.12 0.00%
EDV Endeavour Group Ltd $6.33 +0.80%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

Get the latest news and insights direct to your inbox

Subscribe free

Get free post-market insights with our Evening Wrap

Create an account to receive our concise, data-driven post-market recap, sent directly to your inbox, every day.

Along with the Evening Wrap, you'll join 100k+ investors who receive our Morning Wrap and Weekend Newsletter.