Evening Wrap: ASX 200 flat as 30-year yield hits record high, banks and miners lag, uranium stocks jump

In a nutshell:

• ASX 200 finished flat in a rangebound session, with large caps lagging and the Small Ords (+0.2%) outperforming, a reversal of Tuesday's price action

• Australian 30-year yield rose 5 bps to 5.89%, the highest since the benchmark launched in 2016, while the 10-year rose 6 bps to 5.41%

• Uranium stocks jumped after Google signed a 20-year, 890MW deal with Constellation Energy, though Paladin Energy (+2.5%) faded from a session high of 6.5%

Let's dive in

• A flattish and rangebound day for the ASX 200, trading between a session high of +0.21% and a low of -0.37%. It was the opposite of yesterday's session, where large caps held up and the smaller end tumbled. This time, the ASX 20 and ASX 50 fell 0.34% and 0.17% respectively, while the Small Ords and Emerging Companies rose 0.15% and 0.05% respectively. I know, not a whole lot of price action

• The Discretionary index is starting to bottom and make a small upswing after a 16% correction between 6 August and 28 September. The selloff was driven by a mix of high valuations (Wesfarmers at ~36x, now 30x) and the usual suspects of cost inflation, rising rate hike expectations and abysmal consumer confidence. On that last point, it's interesting that retail stocks are bottoming just after Tuesday's Westpac-Melbourne Institute Consumer Sentiment Index fell 4.7% to 80.4, among the 40 worst readings since the survey began in the early 1970s

• Real Estate stocks bounced again, up 1.9% over the last two sessions, though that only claws back part of the 4.4% skid over the prior three

• This is despite yields pushing higher. The Aussie 3-year yield rose 5 bps to 4.94% (still below late-September highs of 5.10%), the 10-year rose 6 bps to 5.41% (close to topping late-September highs of 5.46%) and the 30-year rose 5 bps to 5.89%, the highest since the benchmark launched in October 2016. So the yield backdrop remains as uncomfortable as ever

• Materials was among the laggards as copper (-0.4% to US$6.67/lb) and gold (-0.7% to US$4,134/oz) reversed during market hours, while the US Dollar Index is up 0.25%, reversing yesterday's 0.25% decline. Heavyweights BHP (-0.6%), Rio Tinto (-0.6%) and Fortescue (-2.4%) traded broadly lower

• Financials wound up as the worst performing sector, though the sector has traded within a ~2% range since mid-September. CBA and Westpac posted notable declines of 1.3% and 1.2% respectively

• Uranium stocks caught a broad bid after Google signed a 20-year agreement with Constellation Energy, the largest US nuclear operator, for 890MW from upgrades to 11 existing reactors. That said, Paladin Energy (+2.5%) faded from a session high of 6.5%, as did most names. Uranium remains in a tricky spot. The backdrop of tech companies racing to lock in power for data centres, a looming uranium deficit and China's nuclear buildout (among other factors) is hard to argue against, and the uranium term price hit a record $96.50/lb in August and September. But the stocks trade more on momentum and risk appetite. They're also heavily shorted, with Paladin, Boss, Deep Yellow and Lotus all sitting around 8-13% short interest, so you get days like this where they pop at the open and trend lower as short covering fades

• Speaking of data centres, has anyone checked on NextDC? The stock is down 31% since mid-August to $10.23, nearing the lows of the April 2025 Trump tariff tantrum. Peer DigiCo is down 17% over the same period, though it has some asset backing after selling its CHI1 asset earlier this year (cutting net debt from $1.5bn to $0.5bn) as well as its LAX1-2 sites. Management said it intends to explore capital management initiatives, including returning excess capital

• Overall, very much the same commentary as prior days. Bond yields continue to trade in a volatile and upward fashion, and Brent is slightly higher at US$101.28 a barrel. Can high yields and resilient markets co-exist? Yes, hence the S&P 500 and Nasdaq sitting at record highs. But for our market, it's driving a lot of choppy price action and making conviction hard to come by

• Australian industrial activity fell back into deep contraction in September, with the Ai Group Industry Index down 21.1 points to -25.5, with activity

  • New orders fell 22.4 points to -35.9, with trend scores suppressed since the energy crisis began in March

  • Construction PCI dropped 29.8 points to -34.5, while the manufacturing PMI improved 6.2 points to -8.7

  • Finance availability deteriorated sharply, with loan and lease approvals taking longer as lenders grew more cautious on credit risk

  • Input prices eased 10.6 points to 56.8 while sales prices rose 13.0 points to 13.6, and the wages indicator climbed 2.8 points to 49.5

  • Pockets of growth came from data centres, defence and renewable infrastructure projects