Market Wraps

Evening Wrap: ASX 200 edges lower, iron ore slumps to US$102, Pilbara Minerals rallies 5%

Mon 24 Apr 23, 5:11pm (AEST)

 The S&P/ASX 200 closed 8 points lower, down -0.12%. 

Another uneventful session ahead of Anzac day, iron ore miners slump as spot prices approach US$100 a tonne, capital begins to rotate towards Australia-based lithium producers, tech stocks are holding up or breaking out and a few Macquarie notes on resource heavyweights.

Let's dive in.


Today in Review

Mon 24 Apr 23, 4:44pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,322.0 -0.12%
All Ords 7,512.2 -0.14%
Small Ords 2,895.5 +0.06%
All Tech 2,282.6 +0.75%
Emerging Companies 2,124.6 -0.81%
Currency
AUD/USD 0.6676 -0.22%
US Futures
S&P 500 4,136.5 -0.49%
Dow Jones 33,788.0 -0.48%
Nasdaq 13,027.75 -0.48%
Name Value % Chg
Sector
Real Estate 3,120.2 +1.14%
Information Technology 1,583.2 +0.98%
Health Care 44,888.2 +0.96%
Utilities 8,626.2 +0.71%
Consumer Staples 13,651.7 +0.61%
Consumer Discretionary 3,102.2 +0.60%
Industrials 6,895.2 +0.54%
Communication Services 1,552.9 +0.51%
Financials 6,331.9 -0.01%
Energy 10,598.4 -0.60%
Materials 18,027.4 -1.66%

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ASX 200 Session Chart

S&P ASX 200 (LIVE DATA) Share Prices & Charts - Market Index
(Source: Market Index)

Markets

A pretty dull session. I guess half the population is just enjoying an extra long weekend. Weakness from Materials and Energy was offset by everything else. The ASX 200 traded in a relatively tight range today, edging slightly lower.

  • Materials led to the downside, led by iron ore miners. More than 40% of steel furnaces in Tangshan have gone into maintenance this week, reducing iron ore demand, according to ANZ Research

  • Energy eased in-line with a fall in oil prices. This comes amid signs of soft demand and Russian exports bouncing back above 3 million barrels a day last week

Economy

No major economic announcements.


Latest news


Market Insights

Lithium: Pilbara surges again

It's really interesting to see Pilbara Minerals (ASX: PLS) rally 5.2% while most other lithium names closed in red.

In Monday's Morning Wrap, we noted some considerations for Chile's plans to nationalise its lithium industry including:

  • A shift away from Chile (and potentially Argentina) based assets

  • A shift towards other jurisdictions such as Canada, US and Australia

  • As well as Pilbara Minerals rallying 3.3% last Friday

We continued to see that trend play out today, with most ex-Australia explorers, developers and producers lower. Pilbara Minerals led the local pack, but names like Core Lithium (ASX: CXO) and Mineral Resources (ASX: MIN) also rose around 2%.

Tech stocks: Holding up or breaking out

Is it just me or is the local tech sector also behaving like a safe haven?

A lot of tech names are either moving out or holding up relatively well compared to the rest of the market. Here are some charts of interest:

Technology One chart
Technology One daily chart (Source: TradingView)
WTC chart
Wisetech weekly chart (Source: TradingView)
AD8 chart
Audinate chart (Source: TradingView)
Data3 chart
Data#3 chart (Source: TradingView)

Interesting news and movers

Trading higher

  • +7.5% Nanosonics (NAN)

  • +5.2% Pilbara Minerals (PLS)

  • +2.9% Dicker Data (DDR) – Distribution Contract

Trading lower

  • -7.9% InvoCare (IVC) – Takeover withdrawn

  • -7.4% South32 (S32) – Q3 production

  • -4.5% Lake Resources (LKE) – Down 10% in previous three

  • -3.4% Fortescue Metals (FMG) – Q3 production

  • Iron ore sector move: Rio (-3.3%), Champion Iron (-2.9%), BHP (-1.9%)

  • Gold sector move: Ramelius (-3.3%), Evolution (-2.3%), Northern Star (-1.2%)


Broker updates

Macquarie notes:

BHP (BHP): Outperform with $52.00 target price

  • “Solid production in iron-ore and metallurgical coal and a beat in energy coal offset the weaker output at Escondida and Nickel West.”

  • “The stock is trading on an FY24 free cash flow yield of 11%, rising to 13% at spot prices.”

Lynas (LYC): Neutral with $6.50 target price

  • “LYC’s 3QFY23 result was mixed with in line NdPr production offset by soft total REO output; realised prices were 19% lower due to product mix.”

  • “We now assume a ~3-month production suspension in 1HFY24 with sales supported by inventory drawdown.”

  • “In our view, uncertainties of Kalgoorlie’s ramp up and operations at LYC’s Malaysia plant present headwinds for the company’s near-term earnings outlook.”

Whitehaven Coal (WHC): Outperform with $8.50 target price

  • “3QFY23 saleable coal production and coal sales were soft, with Maules Creek headwinds driving a FY23 guidance downgrade in the quarter.” 

  • “Realised thermal coal pricing of US$280/t remains strong and WHC currently boasts an impressive cash position of A$2.7b.”

  • “The resumption of the buy-back, improvements in operational run rate at Maules and Narrabri and construction of Vickery are key near-term catalysts.”

Woodside (WDS): Neutral with $33.0 target price 

  • “1Q revenues stronger than expected, mainly on better LNG price realizations. 32% spot gas exposure was higher than 20-25% CY23 guide.”

  • “Neutral. Expanding exploration portfolio offers upside potential in US GoM as well as appealing plays in West Africa oil & Eastern Mediterranean gas.”


Scans

Top Gainers

Code Company Last % Chg
LRV Larvotto Resource... $0.325 +54.76%
WMG Western Mines Gro... $0.815 +41.74%
MTC Metalstech Ltd $0.385 +32.76%
L1M Lightning Mineral... $0.195 +30.00%
OSL Oncosil Medical Ltd $0.013 +30.00%
View all top gainers

Top Fallers

Code Company Last % Chg
GGE Grand Gulf Energy... $0.014 -33.33%
RGS Regeneus Ltd $0.011 -26.67%
K2F K2FLY Ltd $0.10 -20.00%
M24 Mamba Exploration... $0.12 -20.00%
OSX Osteopore Ltd $0.076 -20.00%
View all top fallers

52 Week Highs

Code Company Last % Chg
WMG Western Mines Gro... $0.815 +41.74%
ODA Orcoda Ltd $0.21 +16.67%
RXH Rewardle Holdings... $0.025 +13.64%
EQR EQ Resources Ltd $0.08 +9.59%
TSK Task Group Holdin... $0.405 +9.46%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
GGE Grand Gulf Energy... $0.014 -33.33%
OSX Osteopore Ltd $0.076 -20.00%
EEL Enrg Elements Ltd $0.016 -15.79%
INV Investsmart Group... $0.16 -15.79%
NOX Noxopharm Ltd $0.059 -14.49%
View all 52 week lows

Near Highs

Code Company Last % Chg
ALO Alloggio Group Ltd $0.275 -0.90%
FLT Flight Centre Tra... $19.19 +1.00%
BILL Ishares Core Cash... $100.54 0.00%
SLA Silk Laser Austra... $3.01 0.00%
ORI Orica Ltd $16.15 +0.19%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
NVX Novonix Ltd $0.935 -5.08%
BRN Brainchip Holding... $0.405 -2.41%
WAX Wam Research Ltd $1.18 +1.29%
BOQ Bank of Queenslan... $6.02 -0.33%
BUB Bubs Australia Ltd $0.195 -2.50%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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