Market Wraps

Evening Wrap: ASX 200 flat, copper stocks tumble, CSL hits a 3-month high

Fri 12 May 23, 4:44pm (AEST)

 The S&P/ASX 200 closed 5 points higher, up 0.07%. 

The market finishes the week 0.5% higher, UK's GDP unexpectedly contracts in March, Materials and Energy stocks struggle amid falling commodity prices, analyst takeaways on Allkem and Graincorp and copper rolls over to a fresh six month low.

Let's dive in.


Today in Review

Fri 12 May 23, 4:23pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,256.7 +0.07%
All Ords 7,453.2 +0.05%
Small Ords 2,918.6 +0.12%
All Tech 2,293.0 +0.86%
Emerging Companies 2,115.8 -0.48%
Currency
AUD/USD 0.6692 -0.15%
US Futures
S&P 500 $4,150.0 +0.15%
Dow Jones $33,401.0 +0.09%
Nasdaq $13,471.0 +0.18%
Name Value % Chg
Sector
Health Care 44,795.1 +1.23%
Information Technology 1,612.5 +0.98%
Consumer Discretionary 3,090.9 +0.63%
Real Estate 3,188.1 +0.61%
Consumer Staples 13,462.7 +0.59%
Financials 6,170.2 +0.20%
Industrials 6,893.5 +0.19%
Communication Services 1,558.4 +0.19%
Utilities 8,560.0 +0.00%
Energy 10,615.4 -0.54%
Materials 17,838.4 -0.97%

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ASX 200 Session Chart

S&P ASX 200 (LIVE DATA) Share Prices & Charts - Market Index
Another session where the ASX 200 was little changed (Source: Market Index)

Markets

Another uneventful session. This marks the fourth session in a row where the market has refused to close around session lows. But doesn't want to close much higher either. Healthcare stocks led to the upside, with CSL (+1.4%) closing at a 3-month high. Technology continues to outperform and Wisetech (+1.1%) closed at an all-time high. This was offset by weakness across Energy and Materials.

Economy

UK GDP rose 0.2% year-on-year in the first quarter of 2023.

  • In-line with consensus expectations

  • GDP fell 0.3% month-on-month in March, below expectations of no change

  • March contraction was driven by a 0.5% decline in the services sector


Latest news


Market Insights

Allkem and Livent merger: Analyst takeaways

Most analysts were positive on the deal, with the view that the the merger will create a bigger and more diversified lithium producer. Several brokers said that this deal could serve as a catalyst for more M&A in the sector, especially towards more advanced lithium companies. A few key takeaway from various brokers:

  • RBC Capital Markets: Transaction expected to speed up M&A in the sector, most significant upside expected at Allkem's Argentinian brine ops due to its substantial resource

  • Raymond James: Livent's portion of the deal explained by its fast expansion of downstream capacity

  • CLSA: Allkem loses its M&A premium or possibility of exploring a US listing, the merger appears to discount some of Allkem's upside.

  • Jefferies: Transaction could yield better returns given the possibility of accelerating project timeline and synergies, Mt Cattlin is an asset that does not fit the Argentina/Canada narrative

Graincorp's half-year earnings: Analyst takeaways

Graincorp posted better-than-expected earnings on Thursday and the stock is up more than 15% in the last two sessions. Analysts highlighted the strong EBITDA and net profit figures, driven by higher volumes and improved margins. A few key takeaways:

  • Macquarie: Cautious on development of El Nino patterns in late 2023, strong balance sheet provides opportunities for capital management, flagged weak global wheat prices and Russian grain supply increases as potential headwinds

  • Wilsons: Expects solid grain volumes to underpin strong earnings over the next 18 months

  • The average target price across 8 sell-side analysts was raised by 2.3% to $9.00

Copper: A break towards the downside

Dr Copper is having a little bit of a breakdown, taking out a key support area and falling 3.4% overnight to US$3.71/lb. This was after China posted its lowest inflation print in more than two years and wholesale prices deflated 3.6% year-on-year.

Copper inventories in LME-registered warehouses have been on the rise, up to 75,950 tonnes on Thursday, the highest since March.

Copper
Copper (Source: TradingView)

Interesting news and movers

Trading higher

  • +21.4% Latin Resources (LRS)

  • +13.0% Lake Resources (LKE) – Continuation rally, up 10.6% in previous three

  • +8.0% Zip (ZIP)

  • +5.9% Graincorp (GNC) – Earnings (Thurs)

  • +4.7% News Corp (NWS) – Earnings

  • +4.1% Appen (APX) – Bounce after down 27.3% in previous three

  • +4.0% Propel Funeral Partners (PFP) – Acquisitions

Trading lower

  • -11.5% Panoramic Resources (PAN)

  • -7.4% Ardent Leisure (ALG)

  • -6.0% Neometals (NMT)

  • -4.4% QBE Insurance (QBE) – Q1 update

  • Gold sector move: Ramelius (-6.3%), Evolution (-2.6%), Newcrest (-2.2%)

  • Copper sector move: 29Metals (-5.7%), Sandfire Resources (-5.5%)


Broker notes

Broker notes are not available today.


Scans

Top Gainers

Code Company Last % Chg
CLT Cellnet Group Ltd $0.027 +50.00%
CMO Cosmo Metals Ltd $0.13 +30.00%
BMO Bastion Minerals Ltd $0.034 +25.93%
BEL Bentley Capital Ltd $0.05 +25.00%
EPN Epsilon Healthcar... $0.02 +25.00%
View all top gainers

Top Fallers

Code Company Last % Chg
HMG Hamelin Gold Ltd $0.12 -20.00%
JNO Juno Minerals Ltd $0.06 -20.00%
ERA Energy Resources ... $0.033 -17.50%
SIO Simonds Group Ltd $0.105 -16.00%
MHK Metal Hawk Ltd $0.11 -15.39%
View all top fallers

52 Week Highs

Code Company Last % Chg
ENR Encounter Resourc... $0.26 +23.81%
1TT Thrive Tribe Tech... $0.027 +22.73%
LRS Latin Resources Ltd $0.17 +21.43%
CUS Copper Search Ltd $0.34 +13.33%
MEI Meteoric Resource... $0.19 +8.57%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
JNO Juno Minerals Ltd $0.06 -20.00%
ERA Energy Resources ... $0.033 -17.50%
TSI Top Shelf Interna... $0.35 -14.63%
NIS Nickelsearch Ltd $0.064 -12.33%
DBO Diablo Resources Ltd $0.038 -9.52%
View all 52 week lows

Near Highs

Code Company Last % Chg
HZR HAZER Group Ltd $0.685 -4.20%
AIA Auckland Internat... $8.23 -0.48%
APE Eagers Automotive... $14.55 +0.62%
WTC Wisetech Global Ltd $70.89 +0.97%
GOR Gold Road Resourc... $1.875 -1.83%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
AMA AMA Group Ltd $0.138 -5.17%
SM1 Synlait Milk Ltd $1.325 -1.85%
VUL Vulcan Energy Res... $4.98 +1.22%
DGL DGL Group Ltd $1.323 +2.52%
AEE Aura Energy Ltd $0.185 -2.63%
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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