Evening Wrap: ASX 200 dips despite surging resources and energy stocks rejoicing big China stimulus news

On hold. Again. The RBA chose to keep its official cash rate at 4.35% today, much as expected.

The response from stocks was largely positive, with the benchmark S&P/ASX 200 rising modestly but steadily following the announcement. No cut any time soon was the gist of the September Statement, but it does appear clear now that the threat of hikes is off the table.

Surging Chinese stocks and commodity prices helped the Resources and Energy (uranium 🚀, lithium 🚀, and iron ore 🚀) sectors to strong gains today, while the RBA news helped the interest rate sensitives of Real Estate, Technology, and Consumer Discretionary.

As usual, you'll also find the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all of the key upcoming economic data in tonight's Evening Wrap.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 10.9 points lower at 8,142.0, smack-bang at the mid-point of the session's range. Despite the dip in the benchmark, in the broader-based S&P/ASX 300 (XKO), advancers beat decliners by a tidy 173 to 93.

The big story today (apart from the RBA) was easily the massive gains in some areas of the Resources (XJR) (+2.5%) and Energy (XEJ) (+1.5%) sectors. If you dig stuff out of the ground and send it to China, it was a very good thing today, as Beijing announced some of the most significant stimulus measures this year to jump start the ailing Chinese economy.

The package announced by the People's Bank of China included cuts to very short term "repo" rates, i.e., the rate that it pays to banks on overnight surplus cash, as well as key "Prime" lending rates to consumers. Chinese stock and bond markets surged on the news, dragging local mining companies with them. The price of lithium, iron ore, and copper each rose strongly in Asian trade.

Just "a bit" of a white candle in the FTSE China A50 Index Futures today!

The best of the Resources and Energy sectors today

The other big winner today was uranium stocks. Check out this article from my colleague Kerry for why.

Now...you can pretty much guarantee with our market that if Resources and Energy are surging, there's a good chance the cash to pay for them has come from somewhere else...

Usually, the Financials (XFJ) (-1.9%) sector is a reliable funding source for the old fund manager sectors switcheroo, but Consumer Staples (XSJ) (-1.9%) also struggled (Coles and Woolies still on the nose after yesterday's announcement of an ACCC probe), and Health Care (XHJ) (-0.27%) has been on the wane for a couple of weeks now.

Economy

Today

• RBA Cash Rate and Statement of Monetary Policy

  • 4.35% unchanged as forecast

  • See this article for further information and analysis

Later this week

Wednesday

• 00:00 USA Consumer Confidence September (103.9 forecast vs 103.3 August)

• 11:30 AUS Consumer Price Index (CPI) August (+2.7% p.a. forecast vs +3.5% p.a. July)

Thursday

• 22:30 Core Durable Goods Orders August (+0.1% m/m vs -0.2% m/m July)

• 23:20 USA Federal Reserve Chairman Jerome Powell speaks

Friday

• 22:30 USA Core PCE Price Index August (+0.2% m/m forecast to +2.6% p.a. vs +0.2% m/m to +2.6% p.a. July)

• 22:30 USA Personal Income & Personal Spending August (+0.4% m/m forecast vs +0.3% m/m July & +0.3% m/m forecast vs +0.5% m/m July)

Latest News

Interesting Movers

Trading higher

• +78.9% Cettire (CTT) - 2024 Annual Report and as part of this, the company's auditors have signed off on its FY24 accounts (there has been some concern over the company's accounting practices for several months).

• +18.8% Lotus Resources (LOT) - Likely short covering rally in ASX uranium sector following positive industry news items last few days (including Microsoft-Constellation and major US banks pledging support for increasing nuclear energy capacity by 2050 - see Kerry's article in News section above).

• +14.0% Tuas (TUA) - FY24 Investor Presentation and FY24 Appendix 4E and Financial Results, rise is consistent with prevailing long term uptrend 🔎📈.

• +12.7% Bannerman Energy (BMN) - Ditto uranium.

• +11.8% Terracom (TER) - No news, general strength in resources stocks today on stronger commodity prices / China stimulus news.

• +11.4% Alligator Energy (AGE) - Ditto uranium.

• +10.6% Deep Yellow (DYL) - Ditto uranium.

• +10.1% Paladin Energy (PDN) - Ditto uranium.

• +10.0% Boss Energy (BOE) - Ditto uranium.

• +9.8% Delta Lithium (DLI) - No news, general strength in resources stocks today on stronger commodity prices / China stimulus news (this time in lithium, which was up close to 3% in China today).

• +8.9% Syrah Resources (SYR) - Becoming a substantial holder (but more likely, just tagged along with every other beaten down thing that miraculously rallied today! Thanks Beijing! 👍).

• +8.7% Aroa Biosurgery (ARX) - No news, not resources!? 🤔

• +8.4% Michael Hill International (MHJ) - Exemption Notice - NZ Climate Related Disclosures.

• +8.2% Fenix Resources (FEX) - No news, general strength in resources stocks today on stronger commodity prices / China stimulus news (this time in iron ore, which was up 5.5% in Singapore today 🚀).

• +8.0% Winsome Resources (WR1) - Ditto lithium.

• +7.8% Silex Systems (SLX) - Ditto uranium.

• +7.1% Liontown Resources (LTR) - Ditto lithium.

• +7.1% Centaurus Metals (CTM) - No news, general strength in resources stocks today on stronger commodity prices / China stimulus news (and nickel was up over 1% in London overnight).

• +6.9% Mount Gibson Iron (MGX) - Ditto iron ore.

• +6.9% Aura Energy (AEE) - Ditto uranium.

• +6.5% Mineral Resources (MIN) - Ditto iron ore / lithium.

• +6.2% Nexgen Energy (NXG) - Ditto uranium.

Trading lower

• -18.4% Light & Wonder (LNW) - Update on Dragon Train Litigation.

• -9.5% Northern Minerals (NTU) - Notice under Section 708A(5)(e) of the Corporations Act, fall is consistent with prevailing short and long term downtrends 🔎📉.

• -8.1% Impedimed (IPD) - N, fall is consistent with prevailing short and long term downtrends 🔎📉.

• -6.5% Talga Group (TLG) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉.

• -5.6% Neometals (NMT) - No news, fall is consistent with prevailing long term downtrend 🔎📉.

• -5.4% Tabcorp (TAH) - No news, fall is consistent with prevailing long term downtrend 🔎📉.

• -5.1% Argosy Minerals (AGY) - No news, conspicuously absent from lithium rally today!

Broker Notes

• The A2 Milk Company (A2M)

  • Retained at buy at Citi; Price Target: $7.04

• AMP (AMP)

  • Retained at overweight at Morgan Stanley; Price Target: $1.48

• ASX (ASX)

  • Retained at equal-weight at Morgan Stanley; Price Target: $58.00

• AUB Group (AUB)

  • Retained at overweight at Morgan Stanley; Price Target: $37.65

• Boab Metals (BML)

  • Retained at buy at Shaw and Partners; Price Target: $0.40 from $0.44

• Brambles (BXB)

  • Retained at buy at Ord Minnett; Price Target: $20.80 from $20.30

• Chrysos Corporation (C79)

  • Retained at buy at Shaw and Partners; Price Target: $7.20

• Challenger (CGF)

  • Retained at equal-weight at Morgan Stanley; Price Target: $7.20

• Coles Group (COL)

  • Downgraded to hold from outperform at CLSA; Price Target: $17.60 from $20.20

  • Retained at neutral at Goldman Sachs; Price Target: $18.00

• Computershare (CPU)

  • Retained at equal-weight at Morgan Stanley; Price Target: $27.70

• Fletcher Building (FBU)

  • Retained at neutral at Goldman Sachs; Price Target: $3.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $2.48 from $2.66

• GQG Partners (GQG)

  • Retained at overweight at Morgan Stanley; Price Target: $3.80

• Healius (HLS)

  • Retained at sell at Citi; Price Target: $1.50

  • Upgraded to neutral from underweight at Jarden; Price Target: $1.67 from $1.41

  • Upgraded to neutral from underweight at JP Morgan; Price Target: $1.65 from $1.00

  • Retained at neutral at Macquarie; Price Target: $1.60

• Hub24 (HUB)

  • Retained at overweight at Morgan Stanley; Price Target: $62.00

• Insurance Australia Group (IAG)

  • Retained at equal-weight at Morgan Stanley; Price Target: $7.10

• IDP Education (IEL)

  • Retained at neutral at Macquarie; Price Target: $16.00

• Insignia Financial (IFL)

  • Retained at underweight at Morgan Stanley; Price Target: $2.21

• Imdex (IMD)

  • Upgraded to hold from sell at Bell Potter; Price Target: $2.05 from $1.90

  • Retained at sell at Citi; Price Target: $1.95 from $2.00

• Iperionx (IPX)

  • Retained at buy at Bell Potter; Price Target: $3.95 from $3.85

• Jumbo Interactive (JIN)

  • Upgraded to buy from overweight at Jarden; Price Target: $15.50 from $14.70

• Johns Lyng Group (JLG)

  • Retained at buy at Canaccord Genuity; Price Target: $6.10 from $6.23

  • Retained at neutral at Citi; Price Target: $4.55

  • Retained at buy at Jefferies; Price Target: $5.60 from $5.50

  • Retained at outperform at Macquarie; Price Target: $4.90 from $5.10

  • Retained at buy at Moelis Australia; Price Target: $5.11

  • Retained at add at Morgans; Price Target: $5.10

• Lindsay Australia (LAU)

  • Retained at buy at Shaw and Partners; Price Target: $1.20

• Latitude Group (LFS)

  • Retained at underweight at Morgan Stanley; Price Target: $0.97

• Lunnon Metals (LM8)

  • Retained at buy at Shaw and Partners; Price Target: $0.60

• Light & Wonder (LNW)

  • Retained at outperform at Macquarie; Price Target: $186.00

• Arcadium Lithium (LTM)

  • Retained at buy at Citi; Price Target: $6.50

• Magellan Financial Group (MFG)

  • Retained at underweight at Morgan Stanley; Price Target: $9.30

• Macquarie Group (MQG)

  • Retained at overweight at Morgan Stanley; Price Target: $234.00

• Netwealth Group (NWL)

  • Retained at overweight at Morgan Stanley; Price Target: $23.50

• Patriot Battery Metals (PMT)

  • Retained at buy at Citi; Price Target: $0.75

• Perpetual (PPT)

  • Retained at equal-weight at Morgan Stanley; Price Target: $20.60

• PSC Insurance Group (PSI)

  • Retained at overweight at Morgan Stanley; Price Target: $6.19

• QBE Insurance Group (QBE)

  • Retained at overweight at Morgan Stanley; Price Target: $19.30

• REA Group (REA)

  • Retained at buy at Bell Potter; Price Target: $226.00

• Steadfast Group (SDF)

  • Retained at equal-weight at Morgan Stanley; Price Target: $6.64

• Select Harvests (SHV)

  • Downgraded to neutral from buy at UBS; Price Target: $4.00 from $4.25

  • Downgraded to marketperform from overweight at Wilsons; Price Target: $4.57 from $5.53

• Suncorp Group (SUN)

  • Retained at overweight at Morgan Stanley; Price Target: $20.50

• Tuas (TUA)

  • Retained at buy at Citi; Price Target: $5.25

• Webjet (WEB)

  • Retained at neutral at Macquarie; Price Target: $7.63 from $8.72

• Woolworths Group (WOW)

  • Retained at buy at Goldman Sachs; Price Target: $40.10

Scans