Evening Wrap: ASX 200 falls, tech stocks outperform, Appen reverses a 17% selloff

The local sharemarket falls for a second consecutive session, tech stocks continue to follow the Nasdaq and outperform, Resource stocks were heavy amid disappointing Chinese economic data, Japan's economy rebounds and Macquarie's take on copper.

Let's dive in.

ASX 200 Session Chart

ASX 200 falls but off session lows (Source: Market Index)

Markets

Tuesday's downward momentum carried into today's session. The ASX 200 was red but bounced off session lows of -1.04% and its 200-day moving average. Technology stocks rallied, in-line with the Nasdaq's outperformance. Materials led to the downside amid a firmer US dollar, a slump in gold prices and weak Chinese economic data from Tuesday. The market was extremely calm last week and its first decisive move has so far been towards the downside. Let's see how the rest of the week plays out.

Economy

Japan’s GDP growth accelerated to 1.6% in the March quarter from -0.1% in the previous quarter.

• Strongest growth since the June quarter 2022

• Beat analyst expectations of 0.7%, driven by consumption, business investment and public capex offsetting a decline in net exports

• Japan’s Nikkei 225 Index rises to above 30,000 for the first time since September 2021

Latest news

Interesting news and movers

Trading higher

• +34.4% Serko (SKO) – Earnings

• +19.1% Temple & Webster (TPW) – Earnings

• +16.7% Patriot Battery Metals (PMT) - Drill results

• +13.2% Cettire (CTT) – CEO denies selldown

• +10.6% Immutep (IMM) – Phase II trial results

• +5.1% PointsBet (PBH) – Upgraded by Ord Minnett

• +0.4% Appen (APX) - Capital raising

Trading lower

• -8.0% Incitec Pivot (IPL) – Earnings

• -6.9% Weebit Nano (WBT) – Responds to ASX query

• Copper sector move: 29Metals (-2.9%), Sandfire Resources (-4.9%)

• Gold sector move: Bellevue Gold (-3.4%), Gold Road (-3.1%), Perseus (-2.8%), Evolution Mining (-2.3%), Newcrest Mining (-2.1)

Broker notes

Macquarie on copper:

• “Virtually all the major producers have now reported their Q1 production numbers, with the results showing production was relatively weak.”

• “On a country-basis, government data for top producers Chile and Peru shows mixed results. Chilean production was down 2.2% in Q1, with Codelco production down 10% as it continues to struggle with technical issues and delays at its projects.”

Macquarie notes:

Appen (APX): Underperform with $1.35 target price

• “Positively, APX reaffirmed last week’s outlook comments to exit FY23 EBITDA positive on an annualised run-rate basis.”

• “Time to execute on the new GTM strategy plus broader annotation/cyclically exposed tech headwinds will weigh on APX in the next 6-12 months in our view.”

• “Weak Chinese data for April shows the pace of recovery has slowed sharply after most data surprised to the downside.”

Domino’s Pizza (DMP): Neutral with $53.00

• “Softer franchisee sentiment post COVID result in our cautious outlook for the business.”

• “We maintain our preference for Staples in the current macroeconomic environment.”

• “We note the downside risk to our call is that if inflationary and interest rate pressures continue, and consumption out of the home slows.”

• “To the upside, we note that government stimulus or the easing of monetary policy may spur consumer spending.”

Scans