Evening Wrap: ASX 200 bounces to finish May in positive territory

The S&P/ASX 200 closed 74 points higher, up 0.96%.

The local sharemarket finished the week on a positive note, pushing May's performance into positive territory, up 0.49%. With Carl away, today's wrap will be pretty brief.

Let's dive in.

ASX 200 Session Chart

ASX 200 higher and finished at best levels (Source: Market Index)

Markets

The ASX 200 was down as much as 3.6% since mid-May and currently experiencing a little bit of an oversold bounce. But with bond yields knocking on the door of key levels (e.g. US 2-year yield still at 4.93%), an unexpected contraction in Chinese manufacturing data, still-hawkish central banks and recent supply fears – this adds a bit of doubt as to how much we can bounce. Let's see if the market can continue today's strength ... or continue to unravel.

That said, tonight is a pretty heavy night for economic data, with Eurozone inflation, India GDP, Canada GDP and US personal consumption expenditures price index (the Fed's preferred inflation measure). An unexpectedly positive US PCE reading could point stocks in the right direction.

Economy

China’s Manufacturing PMI unexpectedly slipped into contraction in May, down to 49.5 from 50.4 in April. This reversal follows two consecutive months of gains and threatens the nation's GDP growth target of around 5% this year.

German retail sales unexpectedly eased 1.2% month-on-month in April after a 2.6% jump in May.

Latest News

Interesting Movers

Trading higher

• +15.3% Telix Pharma (TLX) – Trial results

• +11.5% Catapult Group (CAT) – Earnings (Thu)

• +8.2% Meridian Energy (MEZ) – NZAS signs long-term conditional contract

• +6.2% Bega Cheese (BGA) – CLSA upgrade

• +4.95% Cettire (CTT) – Bell Potter conference

• Gold miners: BGL +6.2%), RMS +5.9%, NST +2.8%, WGX +2.7%, PRU +2.6%, EVN +2.4%

Trading lower

• -6.2% Talga Group (TLG) – Vittangi Graphite Project scoping study

• -2.2% Energy Resources of Australia (ERA) – Application to takeovers panel (Thu)

Broker notes

Xero (XRO): Citi reiterates Buy with $158.20 target price

• Overnight, Xero announced price increases in the UK and also put through packaging changes similar to the changes made in Australia

• "Overall, the pricing changes provide more value/inclusions in the higher-tier plans which aligns with Xero’s strategy to move customers up the ladder. We see the packaging changes impacting ARPU from FY26e onwards."

Xero (XRO): Goldman reiterates Buy with $164.00 target price

• "Although some may also see this as a ‘pull-forward’ of future price rises, and potentially at the expense of subscriber growth, we would disagree, noting that the higher near term revenues as a result of these changes will also allow for greater product investment, underpinning future subscriber/ARPU growth in the UK."

Scans