Evening Wrap: ASX 200 bumbles way to EOFY as gold, tech, and health care lead, tax loss selling hobbles lithium stocks

The S&P/ASX 200 closed 7.9 points higher, up 0.10%.

After all that was said, done, bought and sold – the Aussie stock market went out with a whimper today. We ceded over two-thirds of our mid-morning gain of 59 points, and in the end, there were roughly the same number of stocks rising as falling.

Was it a final and savage bout of tax loss selling that hobbled even further a swathe of beaten down names in lithium and battery materials? I guess we’ll know on Monday if they happen to bounce back...

Of course, it might also have something to do with the generally deteriorating earnings outlook for these companies, and in turn, that this is causing greater supply than demand for said companies' shares!? 🤔

Elsewhere, gold stocks bounced back as the gold price rallied, technology continued to be dragged higher by the Nasdaq, and the defensiveness of health care stocks continued to be appreciated by fund managers who must be invested – but are also frightened by the local- and macroeconomic backdrop.

For the last time this financial year (big sigh!)…

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 7.9 points higher at 7,767.5, 0.66% from its session high and just 0.16% from its low. In the broader-based S&P/ASX 300 (XKO), advancers narrowly lagged decliners by 133 to 137.

For the week, the XJO finished down 28.5 points or 0.37% lower, 0.90% from its intraweek low and 0.38% from its intraweek high.

The Gold (XGD) (+1.2%) sub-index was the best performing sector today, likely in response to a modest rally in the gold price. Note that I covered Macquarie and Morgan Stanley's updated views on gold and the ASX gold sector in the third instalment of my Massive Commodities Review today.

The best of the ASX gold sector today

Also doing well today were Information Technology (XIJ) (+0.9%), Financials (XFJ) (+0.75%) and Health Care (XHJ) (+0.46%). I suggest largely on moves in US tech stocks, a pullback in market yields (helping both Tech and Financials), and a continued skew towards stocks with defensive attributes for the latter.

Doing it tough today was the Materials (XMJ) (-0.98%) sector. This is probably no surprise to you given it's recent form. Possibly (a big maybe) it was due to one last bout of tax loss selling, because base metals were only flat/slightly down overnight.

Lithium prices continued to fall in China today, and perhaps that and not tax loss selling was to blame for this sub-sector's demise. Tuesday and Wednesday's promising rally appears to be a distant memory...

Will we see a bounce on Monday? As a trend follower, and noting the terrible trends in so many stocks within the Materials/Resources sector, I am a skeptic – but today's sell off did appear a little extreme in some cases!

Lithium stocks were prominent in the biggest losers list with the Resources sector today

Economy

Today

• There weren't any major economic data releases in our time zone today.

Later this week

Friday

• 22:30 USA Core PCE Price Index May (+0.1% to +2.5% p.a. forecast vs +0.2% to +2.7% p.a. in April)

• 22:30 USA Personal Income May (+0.4% forecast vs +0.3% in April)

• 22:30 USA Personal Spending May (+0.3% forecast vs +0.2% in April)

Latest News

Interesting Movers

Trading higher

• +12.0% Strike Energy (STX) - No news, continued positive response to yesterday's Walyering-7 Flow Test Update and Spud of Erregulla Deep-1

• +10.7% Spartan Resources (SPR) - No news, continued positive response to yesterday's Ramelius makes strategic investment in Spartan Resources, rise is consistent with prevailing short and long term uptrends 🔎📈

• +7.8% WA1 Resources (WA1) - No news, continued positive response to Wednesday's NEWS, rise is consistent with prevailing long term uptrends 🔎📈

• +7.2% Insurance Australia Group (IAG) - IAG long-term reinsurance agreements and financial update, rise is consistent with prevailing short and long term uptrends 🔎📈

• +6.9% Clarity Pharmaceuticals (CU6) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +6.7% Pantoro (PNR) - Pantoro Repays Term Loan Facility, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.9% Cettire (CTT) - No news, bounce is small compared to plunge following Monday's NEWS

• +5.4% Baby Bunting Group (BBN) - No news, continued positive response to yesterday's NEWS

• +5.1% Silex Systems (SLX) - No news, generally stronger ASX uranium sector today on small rise in uranium price Thursday, bouncing from long term uptrend ribbon 🔎📈

• +5.0% Peninsula Energy (PEN) - No news, generally stronger ASX uranium sector today on small rise in uranium price Thursday

• +4.9% Droneshield (DRO) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +4.8% Nexgen Energy (NXG) - No news, generally stronger ASX uranium sector today on small rise in uranium price Thursday

• +4.6% Lotus Resources (LOT) - No news, generally stronger ASX uranium sector today on small rise in uranium price Thursday

• +4.6% De Grey Mining (DEG) - Credit Approvals Secured for Hemi Gold Project Financing

• +3.6% Suncorp Group (SUN) - Suncorp welcomes FSSA approval, rise is consistent with prevailing short and long term uptrends 🔎📈

• +3.5% Superloop (SLC) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -11.9% Immutep (IMM) - No news, continued negative response to yesterday's Positive topline results from ph2b in head & neck cancer

• -8.8% 4DMEDICAL (4DX) - 4DMedical secures At-the-Market funding facility, fall is consistent with prevailing short and long term downtrends 🔎📈

• -8.7% Bannerman Energy (BMN) - Successful A$85.0m Placement, fall is consistent with prevailing short term downtrend, threatening to close below the long term uptrend ribbon 🔎📈

• -7.2% Novonix (NVX) - No news, possible last gasp tax loss selling…🤔

• -5.8% Pilbara Minerals (PLS) - Ditto with NVX

• -5.6% Latin Resources (LRS) - Ditto with PLS

• -5.5% Botanix Pharmaceuticals (BOT) - Section 708A(5)(e) Notice

• -5.3% Grange Resources (GRR) - Ditto with LRS

• -5.3% Sayona Mining (SYA) - Ditto with SYA

• -5.1% Core Lithium (CXO) - Ditto!

• -4.8% Arcadium Lithium (LTM) - Ditto!

• -4.1% Appen (APX) - Ditto!

• -3.9% IGO (IGO) - Lithium Business - Dividend Update, ditto!

• -3.6% Mineral Resources (MIN) - Ditto!

• -3.3% Talga Group (TLG) - Ditto!

Broker Notes

• Biome Australia (BIO)

  • Retained at buy at Bell Potter; Price Target: $0.73

• Charter Hall Group US Prohibited (CHC)

  • Retained at buy at Citi; Price Target: $13.50 from $14.00

  • Downgraded to underweight from outperform at CLSA; Price Target: $11.51 from $13.74

• Dexus (DXS)

  • Retained at neutral at Citi; Price Target: $8.20

• EML Payments (EML)

  • Initiated at buy at Argonaut Securities; Price Target: $1.10

• Eroad (ERD)

  • Initiated at buy at Shaw and Partners; Price Target: $1.50

• Gentrack Group (GTK)

  • Retained at buy at Bell Potter; Price Target: $10.90

• IGO (IGO)

  • Retained at sell at UBS; Price Target: $5.95 from $7.35

• Arcadium Lithium (LTM)

  • Initiated at neutral at Goldman Sachs; Price Target: $6.50

• Liontown Resources (LTR)

  • Retained at neutral at UBS; Price Target: $1.00 from $1.40

• Lynas Rare Earths (LYC)

  • Retained at buy at Bell Potter; Price Target: $7.80 from $7.55

  • Retained at underweight at Morgan Stanley; Price Target: $4.85

• Macmahon (MAH)

  • Downgraded to hold from buy at Argonaut Securities; Price Target: $0.30

• Mineral Resources (MIN)

  • Retained at sell at UBS; Price Target: $56.00

• Monadelphous Group (MND)

  • Retained at buy at Citi; Price Target: $16.20

• Medibank Private (MPL)

  • Retained at neutral at Macquarie; Price Target: $3.60

• NIB (NHF)

  • Retained at neutral at Macquarie; Price Target: $7.30

• NRW Holdings (NWH)

  • Retained at buy at Citi; Price Target: $3.25

• Paladin Energy (PDN)

  • Retained at buy at Citi; Price Target: $16.00 from $17.00

  • Retained at overweight at Morgan Stanley; Price Target: $16.65

• Pilbara Minerals (PLS)

  • Retained at sell at UBS; Price Target: $2.50 from $2.70

• Patriot Battery Metals (PMT)

  • Retained at buy at UBS; Price Target: $1.00 from $1.30

• Peter Warren Automotive (PWR)

  • Upgraded to positive from neutral at E&P; Price Target: $13.00

• Pexa Group (PXA)

  • Retained at outperform at Macquarie; Price Target: $16.80 from $15.45

• Technology One (TNE)

  • Retained at buy at Bell Potter; Price Target: $20.25

• Universal Store (UNI)

  • Upgraded to buy from neutral at UBS; Price Target: $6.00 from $6.25

• Whitehaven Coal (WHC)

  • Retained at overweight at Morgan Stanley; Price Target: $9.75 from $9.00

Scans