Evening Wrap: ASX 200 closes flat, BHP at all-time highs, Tech stocks rally to a four-month high

The S&P/ASX 200 closed 2 points lower, down -0.03%.

In a nutshell:

• ASX 200 slipped in early trade but managed to finish the session around breakeven

• Most sectors struggled for upside, but soaring tech stocks and gains for miners/energy buoyed the index

• ASX 200 Tech Index (+5.4%) experienced its largest rally since 16 April, closing at the highest since 4 February

• BHP (+0.2%) eked out a fresh all-time high, while other resources-related sectors like copper, gold, coal and more, traded mostly higher

Let's dive in.

ASX 200 Session Chart

ASX 200 closes a breakeven (Source: Market Index)

Markets

• ASX 200 closed fractionally lower but off session lows of (-0.39%)

• Sectors reversed early declines, with Utilities, Financials, Staples and Telcos down as much as 0.5-1.5% in early trade, but managed to finish the session down just 0.1-0.3%

• Tech experienced a notable breakout to four-month highs, very most names up 4-8%, with notable gainers including SiteMinder (+10.8%), Catapult (+10.0%), Pro Medicus (+9.2%), Nuix (+9.0%), Objective Corp (+8.8%), Wisetech (+8.7%), Xero (+7.6%), Megaport (+7.0%), TechnologyOne (+6.4%), Life360 (+5.3%) and more

• Tech strength was largely driven by a sharp rally for US-listed software stocks on Friday, where the iShares Expanded Tech-Software ETF rallying 6.2% overnight. The main catalyst here was a 36.4% rally for Snowflake, which highlighted AI offerings as a key tailwind at its quarterly result

• Quite a few tech names are breaking out from 4-8 month low bases, constructive charts include SDR, TNE, BVS, NXT, CDA and more

• Materials continued to creep higher, with the S&P/ASX 200 Materials Index now 2.5% away from its 2 March record high

• BHP (+0.2%) closed at a fresh all-time high of $62.48 as copper prices edged 0.7% higher to US$6.47/lb

• Overall, markets remain as mixed as ever. Breadth was an even split of ASX 200 gainers and losers today. Software is showing strong signs of bottoming and miners continue to edge higher, but there's not a whole lot of positivity beyond that. Brent is trading 1.8% higher at the time of writing, at US$93.50 a barrel, as the US and Iran signal little progress towards a real peace deal and Israel expands its ground assault in Lebanon. That dynamic could add further upward pressure to oil prices and yields, which tends to weigh on equities.

Economy

• ANZ-Indeed Job Ads: Up 1.8% month-on-month in May, following a 3.7% fall in the prior two months. ANZ expects the economy to slow over coming months as restrictive rates bite, sending Job Ads lower and the unemployment rate gradually higher

• TD-MI Inflation Gauge: This Aussie inflation gauge rose 4.4% year-on-year in May and down 0.3% month-on-month

• China Manufacturing PMI: The RatingDog PMI came in at 51.8 in May vs. 51.6 ests, slightly above expectations but slower than the 52.2 in April. It's still one of the highest observed in the past five years.

---

Interesting Movers

Trading higher

• +25.5% Cettire (CTT) - Launch flagship store on China's TMall

• +16.1% Syrah Resources (SYR) - Tesla agreement update

• +9.2% Pro Medicus (PME) - Contract award

• +8.2% Bapcor (BAP) - Speculation funds are looking at Bapcor

• +6.6% Paragon Care (PCG) - Infinity Group receivership update

Trading lower

• -34.0% PlaySide Studios (PLY) - Meta agreement update

• -25.3% Peter Warren Automotive (PWR) - Earnings guidance downgrade

• -4.4% Collins Foods (CKF) - Broker downgrade

• -2.6% Web Travel Group (WEB) - MD share sale

---

Broker Moves

Atlantic Lithium (A11)

• Retained at neutral at Macquarie; Price Target: $0.32

The a2 Milk Company (A2M)

• Downgraded to underperform from outperform at CLSA; Price Target: $3.80 from $10.60

Brazilian Rare Earths (BRE)

• Downgraded to hold from speculative buy at Ord Minnett; Price Target: $6.95 from $6.25

Bubs Australia (BUB)

• Retained at buy at Bell Potter; Price Target: $0.14 from $0.14

• Retained at accumulate at Ord Minnett; Price Target: $0.12 from $0.15

• Retained at buy at Shaw and Partners; Price Target: $0.16

DroneShield (DRO)

• Downgraded to underperform from hold at Jefferies; Price Target: $2.80 from $3.40

Elevra Lithium (ELV)

• Retained at neutral at Macquarie; Price Target: $13.50

Global Lithium Resources (GL1)

• Retained at outperform at Macquarie; Price Target: $0.80

Graincorp (GNC)

• Upgraded to buy from accumulate at Ord Minnett; Price Target: $7.25

Integral Diagnostics (IDX)

• Upgraded to neutral from sell at Goldman Sachs; Price Target: $2.15 from $2.04

IGO (IGO)

• Retained at outperform at Macquarie; Price Target: $9.50

Liontown (LTR)

• Retained at neutral at Macquarie; Price Target: $2.20

Mirvac Group (MGR)

• Initiated at hold at Jefferies; Price Target: $1.82

Nick Scali (NCK)

• Upgraded to buy from hold at Canaccord Genuity; Price Target: $15.77 from $20.43

PLS Group (PLS)

• Retained at outperform at Macquarie; Price Target: $6.20

PMET Resources Inc (PMT)

• Retained at outperform at Macquarie; Price Target: $0.65

Telstra Group (TLS)

• Downgraded to neutral from overweight at JPMorgan; Price Target: $5.45

Telix Pharmaceuticals (TLX)

• Initiated at overweight at JPMorgan; Price Target: $23.60

Virgin Australia Holdings (VGN)

• Initiated at outperform at RBC Capital Markets; Price Target: $3.50

WIA Gold (WIA)

• Initiated at buy at Ord Minnett; Price Target: $0.70

Wisetech Global (WTC)

• Downgraded to neutral from overweight at JPMorgan; Price Target: $40.00 from $75.00

---

Scans