Market Wraps

Evening Wrap: ASX 200 falls, Energy stocks buck the selloff + NSW hikes coal royalties

Wed 06 Sep 23, 5:32pm (AEDT)

The S&P/ASX 200 closed 57 points lower, down -0.78%. 

The Index sold off despite a relatively flat open, Energy was the only sector to finish in positive territory thanks to higher oil prices and a better-than-feared NSW coal royalty, Australia's economy continued to slow in the June quarter with GDP up 2.1% year-on-year, Citi expects higher long-term iron ore price assumptions and Morgan Stanley's take on the Australian consumer.

Let's dive in.

Today in Review

Wed 06 Sep 23, 4:58pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,257.1 -0.78%
All Ords 7,461.6 -0.73%
Small Ords 2,812.9 -0.82%
All Tech 2,568.2 -0.87%
Emerging Companies 2,050.2 -0.75%
AUD/USD 0.639 +0.17%
US Futures
S&P 500 $4,496.75 -0.13%
Dow Jones $34,666.0 -0.04%
Nasdaq $15,500.5 -0.22%
Name Value % Chg
Energy 11,957.1 +0.96%
Materials 18,009.4 -0.45%
Health Care 39,627.2 -0.47%
Consumer Staples 12,439.2 -0.52%
Utilities 8,392.6 -0.97%
Financials 6,315.2 -1.10%
Real Estate 3,143.5 -1.15%
Consumer Discretionary 3,157.8 -1.22%
Industrials 6,714.6 -1.27%
Communication Services 1,525.6 -1.35%
Information Technology 1,837.5 -1.49%

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ASX 200 Session Chart

S&P ASX 200 (LIVE DATA) Share Prices & Charts - Market Index
ASX 200 falls intraday to finish at worst levels (Source: Market Index)


The ASX 200 sold off intraday to finish at worst levels. Wednesday's weakness was relatively broad-based, with most sectors down around 1%. Such market-wide weakness and an uptick in volatility is not the best look, especially as we work our way through the seasonally weak month of September.

Energy bucked the trend as oil prices continued to trend higher overnight as well as continued strength from uranium and coal sectors. A heavyweight like Woodside finished the session 1.3% higher.


Australia’s GDP rose 0.4% quarter-on-quarter in Q2 and by 2.1% year-on-year.

  • Ahead of economist expectations of 0.3% and 1.8% growth

  • “This was the seventh straight rise in quarterly GDP, and annual growth remained above trend, reflecting the absence of significant COVID-19 disruptions, such as lock downs, in 2022-23." – Katherine Keenan, ABS Head of National Accounts

Australia’s Ai Group Industry Index improved to -11.6 in August from -14.7 in July.

  • Index measures changes in activity in Australia’s industrial sectors

  • Marks the 16th consecutive month in contractionary conditions

  • “The employment, industrial activity and new orders indicators all continued to indicate contractionary conditions.”

  • “Input prices eased, while input volumes grew into expansionary levels not seen since mid-2021. This suggests supply chain pressures are continuing to soften.”

  • “Price indexes all fell in August, reflective of lower but still persistent inflation. The sales price indicator fell to its lowest reading (+6.5) since the height of the pandemic in mid-2020.”

Latest news

NSW Coal Royalties

The AFR reported that the NSW government is considering a revamp of coal royalties ahead of the NSW State Budget.

The current state of play in NSW is a three-tiered system subject to the mining method and depth:

  • Open cut: 8.2%

  • Underground 7.2%

  • Deep Underground 6.2%

The current plan is to increase royalties by 2.6 percentage points from July next year.

A year ago, Queensland increased taxes on coal miners via a progressively tiered rate based on Aussie dollar coal prices:

  • Below $100 a tonne: 7.0%

  • Over $100 and up to $150: 12.5%

  • Over $150 and up to $175: 15.0%

  • Over $175 and up to $225: 20.0%

  • Over $225 and up to $300: 30%

  • Over $300: 40.0% (which is also the highest government coal royalty rate globally)

Barrenjoey notes that "there is no clarity yet as to if NSW will now pursue a progressive tiered system like QLD, simply raise the current royalty rates, or harmonise rates by coal mining method."

The broker has modeled various scenarios including an additional 2%, 4%, 6% and 8% as well as the straight application of the QLD royalty system.

The initial rally for coal stocks (e.g. New Hope (ASX: NHC) briefly rallied 5.2% in early trade) might reflect the fact that a 2.6% royalty is towards the lower end of Barrenjoey's scenarios.

The broker estimates that the straight application of the QLD royalty system could lower Whitehaven (ASX: WHC) FY25 EBITDA by 9.5% while a 2.0% will lower earnings by 4.1%.

Interesting news and movers

Trading higher

  • +7.6% Arafura Rare Earths (ARU)

  • +5.6% Catapult Group (CAT)

  • +1.7% EML Payments (EML)

  • Coal sector move: Yancoal (+2.0%), Coronado Global (+1.2%), New Hope (+0.5%)

  • Oil & Gas sector move: Woodside (+1.3%), Karoon Energy (+1.6%)

  • Uranium sector move: Alligator Energy (+10.0%), Lotus Resources (+8.3%), Deep Yellow (+6.3%), 92Energy (+5.6%), Peninsula Energy (+5.6%)

Trading lower

  • -55.3% PointsBet (PBH) – Capital return

  • -18.2% Orora (ORA) – Institutional placement

  • -11.1% Latin Resources (LRS

  • -8.2% Shaver Shop (SSG) – Ex-dividend 

  • -3.2% Sonic Healthcare (SHL) – Ex-dividend

  • -3.1% Bellevue Gold (BGL

  • -3.0% Amcor (AMC) – Ex-dividend 

  • -2.8% Resmed RMD) – Downgraded by UBS 

Broker notes

Citi’s take on iron ore:

  • China’s steel production cuts not evident yet: “So far there’s no evidence of China steel production cuts. China steel production is up 2.5% YTD and July was up 11.5% on pcp.”

  • Chinese PMIs recovering: “Downstream PMIs for China’s steel industry recovered in August as weather improved, construction pace accelerated modestly and shipbuilding stayed strong.”

  • Iron ore costs step up: “Iron ore opex costs have stepped up and we expect LT Fe price assumptions across the Street must follow.”

Morgan Stanley on the Australian consumer:

  • Discretionary retail: “July trading updates highlight slowing consumer demand. However the reported slowdown was, in most cases, better than feared with the resilience of the consumer again surprising on the upside.”

  • Stock implications: “On aggregate, revenue estimates were upgraded, however EPS was downgraded due to cost pressures.

  • Ratings: “Our Overweight ratings are skewed to retailers where growth is driven by offshore expansion (LOV, BRG) or where there is strategic value (PMV) … We keep UW exposure to large ticket / household spend (JBH and HVN where we move our rating from Equal-weight to Under-weight).”

  • Staples: “Key themes were consistent between WOW and COL (trading down, stock loss, cost headwinds, peaking inflation and investment in efficiency) however there was a stark difference in 2H23 margin performance.”

  • Ratings: “We maintain our Under-weight ratings on WOW and COL with valuations above mid-cycle and our FY24 earnings estimates 4-5% below consensus.”


Top Gainers

Code Company Last % Chg
LV1 Live Verdure Ltd $0.16 +73.91%
BOA Boadicea Resource... $0.046 +31.43%
AGD Austral Gold Ltd $0.031 +29.17%
KGL KGL Resources Ltd $0.14 +27.27%
AUN Aurumin Ltd $0.024 +26.32%
View all top gainers

Top Fallers

Code Company Last % Chg
PBH Pointsbet Holding... $0.745 -54.99%
OLI Oliver's Real Foo... $0.018 -25.00%
AAU Antilles Gold Ltd $0.023 -20.69%
ODY Odyssey Gold Ltd $0.02 -20.00%
BCT Bluechiip Ltd $0.026 -18.75%
View all top fallers

52 Week Highs

Code Company Last % Chg
RDN Raiden Resources Ltd $0.035 +25.00%
WGN Wagners Holding C... $1.02 +8.51%
NGE NGE Capital Ltd $0.805 +3.87%
URNM Betashares Global... $7.60 +3.26%
BMN Bannerman Energy Ltd $2.43 +2.97%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
PBH Pointsbet Holding... $0.745 -54.99%
AAU Antilles Gold Ltd $0.023 -20.69%
ODY Odyssey Gold Ltd $0.02 -20.00%
ORA Orora Ltd $2.89 -17.90%
HAL Halo Technologies... $0.081 -17.35%
View all 52 week lows

Near Highs

Code Company Last % Chg
PCI Perpetual Credit ... $1.01 -1.94%
WVOL Ishares Edge MSCI... $36.79 -0.57%
GCI Gryphon Capital I... $2.01 +0.50%
VVLU Vanguard Global V... $65.97 -1.09%
IHD Ishares S&P/ASX D... $13.14 -0.83%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
ABG Abacus Group $1.11 -3.06%
BGA Bega Cheese Ltd $2.82 -2.08%
BC8 Black Cat Syndica... $0.215 0.00%
LLL Leo Lithium Ltd $0.605 +0.83%
ASB Austal Ltd $1.85 0.00%
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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