Evening Wrap: ASX 200 down for third consecutive day, resources rally, US futures higher

The S&P/ASX 200 closed 19 points lower, down -0.27%.

The local sharemarket inched lower for a third consecutive session, gains from iron ore miners and energy stocks was offset by losses from banks and China's home prices continue to dip.

Let's dive in.

Markets

A rather choppy session for the ASX 200 as gains from Resource sectors was offset by declines from Discretionary, Banks, Telcos and Utilities.

• Energy led to the upside as oil prices rallied overnight after stray Russian missiles hit Poland, killing two civilians. Prices have since faded most of the overnight gains

• Materials also green thanks to a weaker US dollar and higher iron ore prices

• Discretionary was a notable sector of weakness after an earnings miss from Aristocrat Leisure. Most large cap retail names finished the session down around -1%

• Financials also underperformed the market, with Commonwealth Bank shares down almost -2% after yesterday's September quarter update

• 117 of the top 200 declined (59%)

Economy

China’s average new home prices across 70 major cities fell -1.6% year-on-year in October after a -1.5% fall in September. 

• Prices fell -0.37% month-on-month, a faster rate of decline than September

• Between January and October, national home sales fell -25.6% in square metres and -28.2% in terms of value 

Commodities 

"Sentiment across markets was boosted by further signs of easing inflationary pressures. Commodities gained as the subsequent weaker USD supported investor appetite in the sector," said ANZ senior commodity strategist, Daniel Hynes.

• Newcastle coal futures +6.8% to US$330 a tonne

• Iron ore futures +3.3% to US$95.5 a tonne, up 27% from 31 October lows

• Copper -1.1% to US$3.77/lb, down -3.5% in the last three sessions

Latest news

Post market brief

A solid overnight session on Wall Street failed to inspire a green day for the ASX 200. The Big four banks and Macquarie all finished between 0.5% and 1.8% lower, which was enough to offset the positive gains from miners and energy stocks.

Large cap resources remains the place to be amid an easing US dollar and improving Chinese-Australia relations. As well as China's 16-point plan to rescue its depressed real estate sector, which was revealed earlier this week.

The ASX 200 is somewhat in no man's land. It's had a massive 'peak inflation' inspired rally and now drifting a little lower as euphoria dies down. Although these small red days are much better than the big rips and dips we've been seeing all year round.

The question is, what now? What's the next catalyst now that inflation is showing signs of peaking? I'll sleep on it.

XJO chart (Source: TradingView)

Major announcements

Large caps (>$1bn)

• Nufarm (NUF) +8.9% FY23 EBITDA rose 24% to $447m and profits jumped 65% to $107.4m. The crop protection and seed company said ‘conditions remain favourable’ heading into FY23  

• Pilbara Minerals (PLS) +1.9% is targeting a dividend payout ratio between 20-30% of free cash flow for FY23 

• Vicinity Centres (VCX) +1.0% reaffirmed its FY23 earnings per share guidance of 13 to 13.6 cents and targets a dividend payout ratio of 95-100% 

• Oz Minerals (OZL) +0% shares were halted pending another takeover offer from BHP

• GrainCorp (GNC) -2.0% posted 173% net profit growth in FY22 to $380.4m but guided to weaker margins and expects flooding to impact both crop yield and quality 

• Aristocrat Leisure (ALL) -5.0% posted 18% revenue growth in FY22 to $5.57bn and net profit rose 15.7% to $948.5m. The gaming company said it expects to see profit growth in FY23, no specific guidance was provided  

Mid-to-small caps

• KMD Brands (KMD) +4.2% reported 1Q23 sales growth of 61.8% as the business cycles weak lockdown-induced numbers from last year 

• Money3 Corp (MNY) -4.6% posted 1Q23 revenue growth of 10.8% to $51m and its loan book grew 18.2% to $753.7m. The personal loans provider is targeting a $900m loan book for FY23, up from $733m in FY22

• Pact Group (PGH) -7.2% AGM guided to $68-73m EBIT and $20-25m net profit for the first half of FY23. This compares to a respective $83m and -$21m in 1H22

Broker updates 

Scans