Evening Wrap: ASX 200 closes out FY25 up 9.9%, Iron ore miners sink, Healthcare stocks bounce

The S&P/ASX 200 closed 28 points higher, up 0.33%. 

In a nutshell:

• Carl is away for the next month – Chris Conway and I will be looking after the Evening Wrap

• ASX 200 closes out the month up 1.28%, marking a third straight month of gains and a record monthly close

• Healthcare stocks bounced from a six week low, Materials slipped on iron ore weakness

Let's dive in.

ASX 200 Session Chart

ASX 200 higher, closed off best levels (Source: Market Index)

Markets

• ASX 200 finished the session up 0.33% but off session highs of 0.73%

• Despite some volatility at the index level, breadth was widely positive, with 139 S&P/ASX 200 constituents (70%) closing flat or higher

• VanEck's Australian Equal-weight ETF also closed 0.66% higher, outperforming the official benchmark by 33 bps

• Overall price action continues to remain choppy as the market trades around record levels and highest price-to-earnings in over two decades (ex-Covid). This isn't necessarily bullish or bearish, but some dicey price action as the market digests the recent move and awaits for clearer directional catalysts

• ASX 200 closes FY25 out 9.9% higher and up 1.28% in June, marking a third straight month of gains and the highest monthly close on record

• Commonwealth Bank slipped for a second straight session, down 0.33% while BHP also suffered on slightly lower iron ore prices, shares down 2.0%

• S&P/ASX 200 Healthcare Index bounced 1.58% after falling 1.41% on Friday, CSL (+2.1%), Pro Medicus (+1.6%) and Cochlear (+1.6%) lead to the upside

Economy

• China's manufacturing PMI improved for a second month, rising to 49.7 in June vs. 49.5 in May and in-line with market expectations. The new orders sub-index expanded for the first time in three months and of the 21 industries surveyed, more than half were in expansion territory

• China's non-manufacturing PMI strengthened to 50.5 in June, vs. 50.3 in May and above market expectations of 50.3

Latest news

Interesting Movers

Trading higher

• +9.4% NIB Holdings (NHF) – Broker upgrades

• +7.0% Jame Hardie (JHX) – AZEK shareholders approve takeover

• +4.0% Block (XYZ) – No news

• +3.8% Macquarie Group (MQG) – Broker upgrade

Trading lower

• -4.2% Droneshield (DRO) – Contract win, consolidation move after recent rally

• -3.0% Lynas (LYC) – US-China trade framework to improve rare earth exports

• -2.9% Pilbara Minerals (PLS) – Chinese lithium carbonate futures -0.5%, pullback after recent run

• Iron ore sector move – Champion Iron (-2.5%), BHP (-2.0%), Fortescue (-1.1%)

Broker notes

Alpha HPA (A4N)

• Retained at Buy at Bell Potter; Price Target: $2.00

• Retained at Speculative buy at Bell Potter; Price Target: $2.00

Aussie Broadband (ABB)

• Initiated at Outperform at Macquarie; Price Target: $5.05

Aurelia Metals (AMI)

• Retained at Buy at Ord Minnett; Price Target: $0.31 from $0.41

ANZ Group Holdings (ANZ)

• Retained at Neutral at Citi; Price Target: $27.50

• Retained at Neutral at Macquarie; Price Target: $27.50

APA Group (APA)

• Downgraded to Trim from Hold at Morgans; Price Target: $7.60 from $7.36

Aurizon Holdings (AZJ)

• Retained at Hold at CLSA; Price Target: $3.06 from $3.50

• Retained at Neutral at Jarden; Price Target: $3.10 from $3.15

BHP Group (BHP)

• Retained at Overweight at Morgan Stanley; Price Target: $39.50

Beach Energy (BPT)

• Retained at Sell at Citi; Price Target: $1.15 from $1.22

BWP Trust (BWP)

• Retained at Buy at UBS; Price Target: $4.16

Commonwealth Bank of Australia (CBA)

• Retained at Underperform at Macquarie; Price Target: $105.00

Capstone Copper Corp. (CSC)

• Initiated at Buy at Morgans; Price Target: $11.50

Digico Infrastructure REIT (DGT)

• Initiated at Hold at Jefferies; Price Target: $3.70

Fortescue (FMG)

• Retained at Overweight at Morgan Stanley; Price Target: $16.50

Lynas Rare Earths (LYC)

• Downgraded to Hold from Accumulate at Ord Minnett; Price Target: $8.70

Mineral Resources (MIN)

• Retained at Overweight at Morgan Stanley; Price Target: $42.95 from $35.00

Monadelphous Group (MND)

• Upgraded to Neutral from Negative at Citi; Price Target: $16.65

Macquarie Group (MQG)

• Upgraded to Buy from Neutral at Bank of America; Price Target: $250.00 from $208.00

National Australia Bank (NAB)

• Retained at Neutral at Macquarie; Price Target: $35.00

NIB Holdings (NHF)

• Upgraded to Buy from Neutral at UBS; Price Target: $7.85 from $7.35

NRW Holdings (NWH)

• Retained at Buy at Citi; Price Target: $3.65

Origin Energy (ORG)

• Retained at Neutral at Macquarie; Price Target: $10.12 from $10.00

Predictive Discovery (PDI)

• Retained at Speculative buy at Canaccord Genuity; Price Target: $0.58 from $0.56

PeopleIn (PPE)

• Retained at Speculative buy at Morgans; Price Target: $1.05

Reece (REH)

• Retained at Neutral at Macquarie; Price Target: $14.50 from $16.40

• Retained at Hold at Morgans; Price Target: $14.80

• Retained at Buy at Ord Minnett; Price Target: $18.40 from $20.40

• Retained at Sell at UBS; Price Target: $13.50 from $17.70

Rio Tinto (RIO)

• Retained at Equal weight at Morgan Stanley; Price Target: $119.00 from $119.50

South32 (S32)

• Retained at Overweight at Morgan Stanley; Price Target: $3.05 from $3.65

Superloop (SLC)

• Initiated at Outperform at Macquarie; Price Target: $3.25

Tasmea (TEA)

• Initiated at Buy at Ord Minnett; Price Target: $4.75

Westpac Banking Corporation (WBC)

• Retained at Underperform at Macquarie; Price Target: $27.50

Woodside Energy Group (WDS)

• Upgraded to Neutral from Negative at Macquarie; Price Target: $24.00

Woolworths Group (WOW) Retained at Hold at Bell Potter; Price Target: $31.90 from $31.85

• Retained at Hold at Jefferies; Price Target: $29.50

• Retained at Outperform at Macquarie; Price Target: $33.60

• Retained at Neutral at UBS; Price Target: $32.00

Scans