Evening Wrap: ASX 200 gains on February rate cut hopes, DeepSeek fiasco distant memory as Tech, Real Estate and Uranium stocks rebound

The S&P/ASX 200 closed 47.9 points higher, up 0.57%.

Better than expected inflation data, closing on the RBA's 2-3% average target band, caused nearly a dozen major brokers and economists to speak in favour of a 0.25% February rate cut. Many had penned a May cut prior.

Aussie stocks responded in kind, rallying, also supported by a recovery in global stock markets following the brief DeepSeek fiasco.

Technology, Gold, and Real Estate stocks led the way, but there were few losers in what was a resounding vote of confidence in owning Australian shares. So much so, that the S&P/ASX 200 again sits a stone's throw from a new record high.

Click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key upcoming economic data in tonight's Evening Wrap.

Also, I have detailed technical analysis on the NASDAQ Composite and the S&P/ASX 200 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 47.9 points higher at 8,447.0, roughly mid-range, 0.60% from its session low and 0.41% from its high. Despite the mixed close in the benchmark relative to it’s high, in the broader-based S&P/ASX 300 (XKO) advancers beat decliners by a resounding 220 to 54.

As you'll read in this evening's ChartWatch, below, much of yesteday's DeepSeek craziness had washed through markets by this morning's open on the ASX. This facilitated a broad-based, albeit modest rally today (the close off session highs is disappointing).

This session's strongest were for the most part, yesterday's weakest. So we saw solid rebounds in Information Technology (XIJ) (+2.1%), Gold (XGD) (+2.0%) sub-index, Real Estate Investment Trusts (XPJ) (+1.6%), Utilities (XUJ) (+1.4%), and Energy (XEJ) (+1.1%).

Just four sectors underperformed the benchmark, but three of these (Financials (XFJ) (+0.57%), Consumer Discretionary (XDJ) (+0.52%), and Consumer Staples (XSJ) (+0.35%)) were strong performers during yesterday's DeepSeek fiasco.

Today's best 20 out of the top 500 ASX stocks

The odd one out, that is, it was hit yesterday and was a clear underperformer today – was perennial laggard Resources (XJR) (+0.25%). There's just too many well-established technical downtrends in this sector in my humble opinion. 🤔

Today's worst 20 out of the top 500 ASX stocks

I'll let you check today's Movers and Losers lists, below, as there were plenty of stock-specific goings on.

ChartWatch

NASDAQ Composite Index

Crazy candles! 🤪🕯️

The last time we covered the COMP was in ChartWatch in the Evening Wrap on 23 January.

In that update, we were tracking some substantially improved demand-side technicals post the December swoon. But, and now apparently prudent, I noted it was best to leave a little bit of cash in reserve until the 20007-20205 zone of supply was dealt with.

Prudent because of what transpired on 27-Jan the DeepSeek plunge candle – a 663 point gap-down on open and upward pointing shadow finish.

When reading candles, it’s important to “fill in” those down-gaps as black. So really, that 27-Jan candle is a long black candle with a small downward pointing shadow. It doesn’t change the demand-supply dynamics, of course, I just think it’s easier to understand what’s going on when one sees a long black candle rather than a small white one with a modest upward pointing shadow.

Either way, it didn’t make much difference, as the next candle is about as bullish as you can get – long white body, close very near the high of the session, downward pointing shadow.

Even better, it closed above the midpoint of the previous supply side candle (use the true range (TR) of the 27-Jan candle here) – and therefore nearly completely negates that prior supply-side signal.

So net-net, we’re probably not in a hugely different position than where we were in that last update on 23-Jan.

Which is fine. The bull market remains intact. The price action remains rising peaks and rising troughs (for now). The long term uptrend remains intact. If there is a blemish – it is that the short term trend has neutralised (importantly we closed above it last night, though).

The demand-side must still deal with 20007-20205. Nothing has changed with respect to this item, either.

The new 19204 points of demand is important, but really, demand extends down to 18598-18831 and effectively the long term uptrend ribbon (dynamic).

In the absence of a close below those critical levels, and without a predominance of supply-side candles and or falling peaks / falling troughs, I reiterate: Stay the course.

S&P/ASX 200 (XJO)

Has never looked so good...

The last time we covered the XJO was in ChartWatch in the Evening Wrap on 23 January.

That update, the same day as the corresponding-prior COMP analysis, was also largely about staying the course.

Since, we’ve actually outperformed the COMP through the DeepSeek fiasco – largely shrugging off its losses yesterday but participating in its rally today.

That’s a big tick for demand-side resilience (yesterday), a lack of supply-side motivation (yesterday and today), and a decent serving of FOMO (today).

Demand-side resilience. A lack of supply-side motivation. FOMO. The holy trinity of demand-side control

✅✅✅ = Demand-side control + ⬆️ probability of rising prices.

But! ⬆️Probability never equals guarantee.

There are no guarantees in the market. Just probabilities of one scenario playing out over another. Those probabilities are subjectively determined – for me using my technical analysis.

You place your bets based upon your interpretation of the probabilities. The rest is out of your control. It’s up to the market. You don’t control the market.

So, I suggest you don’t worry too much about the outcomes. Sure, you’re probably going to lose money if the price moves adverse to your subjectively determined probabilistic outcome.

But this is just an outcome.

Focus on getting the probability part of the equation right. Your processes, the validity of your approach (I propose an approach that focuses on demand and supply is beyond reproach!). And the rest will take care of itself.

Get the probability part of it right and the profitability part of it will take care of itself.

The other crucial element of any investing approach is risk management. How much you risk when you risk it. That’s a topic for another day…

Back to the XJO, apart from today’s upward pointing shadow, it’s about as good as you can get. We can see rising peaks and rising troughs, a predominance of demand-side candles (i.e., those with white bodies and or downward pointing shadows), double-green on the trend ribbons and those trend ribbons appear to be acting as zones of dynamic demand. Checkity-check-check-check ✅✅✅✅

“Apart from today’s upward pointing shadow”

A smidge of supply-side motivation there – or potentially even a smidge of demand-side trepidation. But it’s happening at a logical point/zone of supply – 8456-8515. I am always less concerned about supply-side showings exactly where I expect them to occur.

So, today’s upward pointing shadow is only a minor blemish on an otherwise very strong report card here for the XJO.

Demand is 8366-8371 / short term trend ribbon. Bigger picture, the long term uptrend ribbon is shaping (as it always is) as the most important delineator between bull and bear.

Economy

Today

• AUS Consumer Price Index (CPI) December Quarter

  • +0.2% q/q vs +0.3% q/q forecast and +0.2% q/q in September ruarter

  • +2.4% p.a. vs +2.5% p.a. forecast and +2.8% p.a. in September quarter

• CPI Trimmed Mean December Quarter

  • +0.5% q/q vs +0.6% q/q forecast and +0.8% q/q in September quarter

  • +3.2% p.a. vs 3.3% p.a. forecast and +3.5% p.a. in September quarter

  • Better than expected, and closing on the RBA's 2-3% average target band.

  • Caused nearly a dozen major brokers and economists to speak in favour of a 0.25% February rate cut. Many had penned a May cut prior.

Later this week

Thursday

• 06:00 USA FOMC Meeting and Federal Funds Rate (+4.25-4.50% forecast no change vs previous)

• 06:30 USA FOMC Press Conference by Chairman Jerome Powell

Friday

• 00:15 EUR European Central Bank (ECB) Main Financing Rate (+2.90% forecast vs +3.15% previous)

• 00:30 USA Advance GDP December Quarter (+2.7% p.a. forecast vs +3.1% p.a. in September Quarter)

Saturday

• 00:30 USA Core PCE Price Index December (+0.2% m/m and +2.5% p.a. forecast vs +0.1% m/m and +2.4% p.a. in November)

Latest News

Interesting Movers

Trading higher

• +16.1% Paradigm Biopharmaceuticals (PAR) - No news since 24-Jan Paradigm Receives $6.3m R&D Tax Refund, rise is consistent with prevailing short-term uptrend, long-term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +13.0% The Star Entertainment Group (SGR) - Divestment of The Star Sydney Event Centre assets

• +9.8% Bannerman Energy (BMN) - No news, yo-yo move in ASX uranium stocks due to DeepSeek panic yesterday…and the "maybe it's not so bad" recovery today! 🤪

• +8.9% Ora Banda Mining (OBM) - No news since 16-Jan December 2024 Quarterly Activities Report, rise is consistent with prevailing short-term and long-term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +8.6% Bellevue Gold (BGL) - Generally positive broker comments regarding yesterday's Quarterly Activities Report and Quarterly Cash Flow Report (see Broker Moves section below for more details)

• +7.1% Clarity Pharmaceuticals (CU6) - No news since yesterday's Clarity to present COBRA and CLARIFY abstracts

• +7.1% Lotus Resources (LOT) - Lotus Secures Additional Uranium Offtake with Utility, but also general strength in broader ASX uranium sector as DeepSeek moves wash out

• +6.9% Appen (APX) - No news, another DeepSeek uranium yo-yo

• +6.9% Deep Yellow (DYL) - Change in substantial holding (Note: State Street is a rumoured short seller), likely another DeepSeek yo-yo

• +6.7% Metals X (MLX) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +6.0% Praemium (PPS) - No news, continued positive response to 23-Jan Update - Q2 FY2025 Presentation, also subsequent broker rating and price target upgrades, rise is consistent with prevailing short-term and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +5.6% Boss Energy (BOE) - Quarterly Activities Report - December 2024, Quarterly Cashflow Report - December 2024, and December 2024 Quarterly Results Presentation, another DeepSeek uranium yo-yo

• +5.6% Qoria (QOR) - No news, rise is consistent with prevailing short-term and long-term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +5.6% Kelly Partners Group (KPG) - No news, rise is consistent with prevailing short-term and long-term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

Trading lower

• -47.4% Playside Studios (PLY) - Unaudited 1HFY25 Result & Trading Update, fall is consistent with prevailing short and long-term downtrends 🔎📉

• -28.6% Close The Loop (CLG) - Termination of Discussions with Adamantem & 1H25 Update, fall is consistent with prevailing short and long-term downtrends 🔎📉

• -24.4% Aroa Biosurgery (ARX) - December 2024 Quarterly Report and Appendix 4C and Investor Presentation

• -7.6% Accent Group (AX1) - Trading Update

• -5.2% Myer (MYR) - No news since yesterday's Completion of Combination with Premier's Apparel Brands

• -2.9% Autosports Group (ASG) - Trading Update, fall is consistent with prevailing short and long-term downtrends 🔎📉

• -2.7% Viva Energy Group (VEA) - No news, continued negative response to yesterday's 4Q2024 Update, Unaudited FY2024 Result and Refinery Update, also subsequent broker price target cuts, fall is consistent with prevailing short-term and long-term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -2.4% South32 (S32) - No news since 20-Jan December 2024 Quarterly Report, fall is consistent with prevailing short-term and long-term downtrends, a recent regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -2.3% Coronado Global Resources (CRN) - No news since 23-Jan Q4 FY2024 Quarterly Activities Report, also subsequent broker price target cuts, fall is consistent with prevailing short-term and long-term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -1.8% Chalice Mining (CHN) - No news, fall is consistent with prevailing short-term and long-term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -1.7% Capstone Copper Corp. (CSC) - No news, fall is consistent with prevailing short-term and long-term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -1.4% Lynas Rare Earths (LYC) - No news, fall is consistent with prevailing short-term and long-term downtrends, a recent regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -1.3% Domino's Pizza Enterprises (DMP) - No news, fall is consistent with prevailing short-term and long-term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

Broker Moves

• 29METALS (29M)

  • Retained at sector perform at RBC Capital Markets; Price Target: $0.40

• AIC Mines (A1M)

  • Retained at buy at Bell Potter; Price Target: $0.62 from $0.60

  • Retained at buy at Ord Minnett; Price Target: $0.63 from $0.62

• The A2 Milk Company (A2M)

  • Retained at equal-weight at Morgan Stanley; Price Target: $5.90

• Australian Clinical Labs (ACL)

  • Retained at buy at Citi; Price Target: $4.00

• Australian Finance Group (AFG)

  • Retained at neutral at Macquarie; Price Target: $1.64 from $1.61

• AGL Energy (AGL)

  • Upgraded to outperform from neutral at Macquarie; Price Target: $12.08 from $11.67

• Aristocrat Leisure (ALL)

  • Retained at overweight at Morgan Stanley; Price Target: $68.20

• Atlas Arteria (ALX)

  • Retained at sector perform at RBC Capital Markets; Price Target: $5.00

• Ansell (ANN)

  • Retained at neutral at UBS; Price Target: $36.00 from $32.00

• Amotiv (AOV)

  • Retained at buy at Citi; Price Target: $12.65

• Eagers Automotive (APE)

  • Retained at buy at Bell Potter; Price Target: $13.65 from $13.00

• ARB Corporation (ARB)

  • Retained at buy at Citi; Price Target: $49.22

• Accent Group (AX1)

  • Downgraded to neutral from buy at Citi; Price Target: $2.43 from $2.47

  • Retained at overweight at Morgan Stanley; Price Target: $2.75

  • Retained at outperform at RBC Capital Markets; Price Target: $2.40

• Bowen Coking Coal (BCB)

  • Retained at buy at Shaw and Partners; Price Target: $0.04

• Burgundy Diamond Mines (BDM)

  • Retained at buy at Bell Potter; Price Target: $0.10 from $0.18

• Bellevue Gold (BGL)

  • Retained at buy at Bell Potter; Price Target: $2.00 from $1.90

  • Retained at buy at Canaccord Genuity; Price Target: $2.25

  • Retained at outperform at Macquarie; Price Target: $1.70

  • Retained at buy at UBS; Price Target: $1.60 from $1.55

• Boss Energy (BOE)

  • Retained at outperform at Macquarie; Price Target: $4.50

• Breville Group (BRG)

  • Retained at overweight at Morgan Stanley; Price Target: $35.00

• Commonwealth Bank of Australia (CBA)

  • Retained at sell at Ord Minnett; Price Target: $105.00

• Coles Group (COL)

  • Retained at equal-weight at Morgan Stanley; Price Target: $17.80

• Carnarvon Energy (CVN)

  • Retained at outperform at Macquarie; Price Target: $0.22 from $0.29

• Domino's Pizza Enterprises (DMP)

  • Retained at overweight at Morgan Stanley; Price Target: $40.00

• Dropsuite (DSE)

  • Downgraded to hold from buy at Ord Minnett; Price Target: $5.90 from $4.09

• EBR Systems (EBR)

  • Retained at buy at Bell Potter; Price Target: $2.26 from $2.01

• Endeavour Group (EDV)

  • Retained at overweight at Morgan Stanley; Price Target: $5.90

• Environmental Group (The) (EGL)

  • Retained at buy at Bell Potter; Price Target: $0.40

• Fineos Corporation (FCL)

  • Retained at sector perform at RBC Capital Markets; Price Target: $1.70

• Fortescue (FMG)

  • Retained at equal-weight at Morgan Stanley; Price Target: $18.10 from $18.50

• Gold Road Resources (GOR)

  • Retained at buy at Canaccord Genuity; Price Target: $2.65 from $2.70

  • Retained at buy at Euroz Hartleys; Price Target: $2.71

  • Retained at outperform at Macquarie; Price Target: $2.10

  • Retained at sector perform at RBC Capital Markets; Price Target: $2.10 from $2.30

• Guzman y Gomez (GYG)

  • Retained at overweight at Morgan Stanley; Price Target: $38.50

• Healius (HLS)

  • Retained at neutral at Citi; Price Target: $1.05

• Hansen Technologies (HSN)

  • Retained at outperform at RBC Capital Markets; Price Target: $6.00

• Harvey Norman (HVN)

  • Retained at underweight at Morgan Stanley; Price Target: $4.00

• Integral Diagnostics (IDX)

  • Retained at neutral at Citi; Price Target: $3.00

• IDP Education (IEL)

  • Retained at overweight at Morgan Stanley; Price Target: $21.50

• Infomedia (IFM)

  • Retained at sector perform at RBC Capital Markets; Price Target: $1.65

• Ikegps Group (IKE)

  • Retained at buy at Bell Potter; Price Target: $0.93 from $0.94

• Iperionx (IPX)

  • Retained at buy at Bell Potter; Price Target: $5.25

• JB HI-FI (JBH)

  • Retained at underweight at Morgan Stanley; Price Target: $69.20

• Kogan.Com (KGN)

  • Retained at hold at Bell Potter; Price Target: $5.10 from $5.30

  • Retained at accumulate at Ord Minnett; Price Target: $5.55 from $5.30

• KMD Brands (KMD)

  • Retained at equal-weight at Morgan Stanley; Price Target: $0.50

• Lovisa (LOV)

  • Retained at overweight at Morgan Stanley; Price Target: $32.00

• Liontown Resources (LTR)

  • Upgraded to neutral from underweight at Jarden; Price Target: $0.63 from $0.68

• Macquarie Technology Group (MAQ)

  • Retained at outperform at RBC Capital Markets; Price Target: $110.00

• Metro Mining (MMI)

  • Retained at buy at Shaw and Partners; Price Target: $0.17

• Megaport (MP1)

  • Retained at sector perform at RBC Capital Markets; Price Target: $10.00

• Metcash (MTS)

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.35

• Nuix (NXL)

  • Upgraded to buy from hold at Moelis Australia; Price Target: $6.09

  • Retained at buy at Shaw and Partners; Price Target: $5.70 from $7.00

• Nextdc (NXT)

  • Retained at outperform at RBC Capital Markets; Price Target: $20.00

• Oneview Healthcare (ONE)

  • Retained at buy at Bell Potter; Price Target: $0.40

• Paladin Energy (PDN)

  • Retained at neutral at Macquarie; Price Target: $9.10

• Pilbara Minerals (PLS)

  • Retained at outperform at RBC Capital Markets; Price Target: $3.00

• Pro Medicus (PME)

  • Retained at sector perform at RBC Capital Markets; Price Target: $275.00

• Premier Investments (PMV)

  • Retained at overweight at Morgan Stanley; Price Target: $37.50

• Rio Tinto (RIO)

  • Retained at add at Morgans; Price Target: $125.00

• Ramelius Resources (RMS)

  • Retained at sector perform at RBC Capital Markets; Price Target: $3.00

• Sheffield Resources (SFX)

  • Retained at hold at Ord Minnett; Price Target: $0.12 from $0.13

• Sonic Healthcare (SHL)

  • Retained at neutral at Citi; Price Target: $28.00

• Sigma Healthcare (SIG)

  • Retained at underperform at Jefferies; Price Target: $2.05 from $1.75

  • Retained at underperform at Macquarie; Price Target: $1.00

  • Downgraded to hold from accumulate at Ord Minnett; Price Target: $2.70 from $2.15

• Stanmore Resources (SMR)

  • Retained at buy at Citi; Price Target: $3.40

  • Retained at add at Morgans; Price Target: $4.00 from $4.05

  • Retained at buy at Ord Minnett; Price Target: $4.10

• Super Retail Group (SUL)

  • Retained at underweight at Morgan Stanley; Price Target: $15.75

• Tabcorp (TAH)

  • Retained at overweight at Morgan Stanley; Price Target: $0.65

• The Lottery Corporation (TLC)

  • Retained at equal-weight at Morgan Stanley; Price Target: $5.05

• Technology One (TNE)

  • Retained at outperform at RBC Capital Markets; Price Target: $35.00

• Temple & Webster Group (TPW)

  • Retained at overweight at Morgan Stanley; Price Target: $13.15

• Treasury Wine Estates (TWE)

  • Retained at overweight at Morgan Stanley; Price Target: $14.60

• Universal Store (UNI)

  • Retained at buy at Citi; Price Target: $8.91

• Vault Minerals (VAU)

  • Retained at sector perform at RBC Capital Markets; Price Target: $0.45

• Viva Energy Group (VEA)

  • Retained at positive at E&P; Price Target: $3.20

  • Retained at buy at Goldman Sachs; Price Target: $3.25 from $3.35

  • Retained at outperform at Macquarie; Price Target: $3.60 from $4.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.25

  • Retained at buy at UBS; Price Target: $3.20 from $3.40

• Wesfarmers (WES)

  • Retained at underweight at Morgan Stanley; Price Target: $60.70

• Whitehaven Coal (WHC)

  • Retained at buy at Citi; Price Target: $8.30

• Woolworths Group (WOW)

  • Retained at overweight at Morgan Stanley; Price Target: $34.10

• Wisetech Global (WTC)

  • Retained at sector perform at RBC Capital Markets; Price Target: $125.00

• Xero (XRO)

  • Retained at outperform at RBC Capital Markets; Price Target: $195.00

• Zip Co. (ZIP)

  • Retained at buy at Citi; Price Target: $3.30 from $3.15

Scans