Market Wraps

Evening Wrap: ASX 200 gives back early strength + China's producer prices tumble

Mon 10 Jul 23, 5:08pm (AEST)

The S&P/ASX 200 closed 38 points lower, down -0.54%. 

The Index tumbles from a positive start, China's underwhelming consumer prices signal weak economic growth, gold stocks catch a bid, Morgan Stanley initiates upbeat coverage for ASX-listed insurers and UBS expects ASX 200 EPS to fall 3.2% this year.

Let's dive in.

Today in Review

Mon 10 Jul 23, 4:48pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,004.0 -0.54%
All Ords 7,206.9 -0.51%
Small Ords 2,757.3 -0.07%
All Tech 2,359.7 -0.08%
Emerging Companies 2,082.6 -0.59%
AUD/USD 0.6648 -0.66%
US Futures
S&P 500 $4,415.25 -0.42%
Dow Jones $33,832.0 -0.31%
Nasdaq $15,098.5 -0.55%
Name Value % Chg
Information Technology 1,763.4 +0.21%
Financials 6,077.2 -0.27%
Energy 10,684.6 -0.46%
Communication Services 1,514.7 -0.47%
Consumer Discretionary 2,838.9 -0.47%
Utilities 8,745.2 -0.50%
Real Estate 2,971.0 -0.66%
Materials 17,435.9 -0.67%
Health Care 39,589.7 -0.74%
Industrials 6,603.3 -0.94%
Consumer Staples 12,959.9 -1.00%

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ASX 200 Session Chart

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


What a miserable day for the Index. The session started strong, with the ASX 200 up 0.6% but momentum was in the opposite direction. The key drag on markets was China's underwhelming inflation where, most notably the sharp decline in producer prices, which was -5.4% year-on-year in June. This marks the fastest rate of decline since December 2015. A heavyweight name like BHP was up 1.2% in early trade, slumped to around -0.3% after China's inflation print at 11:30 am AEST and spent the rest of the day trending lower, finishing down 1.1%.

We've been noting the pick up in volatility in the past few sessions and what was supposed to be a bounce back session turned into another tumble into no man's land. The market remains in a challenging spot as it tries to juggle renewed higher-for-longer narratives (thanks to strong US economic data), China's deflation problem as well as US earnings season (which kicks off this week).


China’s inflation rate fell to 0% in June from 0.2% in May.

  • Below expectations of inflation staying unchanged at 0.2%

China’s producer price index decelerated to -5.4% in June from -4.6% in May.

  • Below expectations of a fall to -5.0%

  • Marks the ninth consecutive decline in annual producer prices

  • Likely heightens expectations of more forceful stimulus from a Politburo meeting later this month

Latest news

Interesting news and movers

Trading higher

  • +11.7% Vista Group (VGL)

  • +9.9% Melba Energy (MAY)

  • +8.4% Leo Lithium (LLL)

  • +5.4% Cettire (CTT)

  • +4.6% Talga Group (TLG)

  • +4.1% Meteoric Resources (MEI) - Expansion of Caldeira REE Project

  • +4.0% Monadelphous (MND)

  • Gold sector move: Westgold (+5.3%), Bellevue Gold (+5.1%), Northern Star (+1.8%), Gold Road (+1.7%), Newcrest Mining (+1.1%)

Trading lower

  • -14.5% Nexted Group (NXD) - FY23 Guidance

  • -5.5% Strandline Resources (STA) - Seventh shipment of HMC completed

  • -6.7% Macmahon (MAH)

  • -3,8% PointsBet (PBH)

  • -3.3% MetalsX (MLX)

  • -3.1% Tabcorp (TAH)

  • -2.9% Arafura Rare Earths (ARU)

Broker notes

Morgan Stanley on Insurance Brokers:

  • “We initiate on the insurance brokers with a positive stance. We find the industry dynamics in broking attractive, despite the recent increase in multiples.”

  • “They offer strong operating leverage with no balance sheet risk and capital-light business models, making them relatively defensive and high growth at the same time.”

  • “Trading multiples of 17-23x FY25E P/E (UNPAT) or 15-21x (UNPATA) are reasonable in light of projected 10- 17% EPS growth.”

  • “We initiate AUB at Overweight. We think AUB has the best opportunity for earnings growth and yet is cheap vs peers.”

  • “We initiate PSC Insurance Group at Overweight: PSI offers attractive medium-term growth & its "one-team" model drives above-peer margins.”

  • “We Initiate Steadfast Group at Equal-weight: SDF is a strong beneficiary of the hard pricing cycle and has a dominant position in the Australian market with its leading domestic broker network, but we think the valuation is full.”

UBS on earnings expectations:

  • Company downgrades to forward earnings estimates have “slightly” outnumbered upgrades in the past four weeks

  • The magnitude of disappointments have been noticeable and UBS has downgraded ASX 200 year-on-year earnings growth by 0.6% and 1.4% for FY23 and FY24 respectively

  • FY24 ASX 200 EPS growth forecasts now sit at -3.2% year-on-year

  • “Worryingly, we note that previous recession periods saw the Consumer Discretionary and Bank sectors post earnings growth reversals of more than 10% year-on-year.”

  • The investment bank suggests owning the sectors detached from recession risks, including a) exposure to non-cyclical channels (e.g. overweight Technology and Insurance) and b) exposure to income equities that pay high and stable dividends (e.g. overweight infrastructure, utilities and insurance)


Top Gainers

Code Company Last % Chg
HVY Heavy Minerals Ltd $0.22 +100.00%
A8G Australasian Meta... $0.20 +42.86%
AJX Alexium Internati... $0.018 +38.46%
CSF Catalano Seafood Ltd $0.05 +25.00%
MKL Mighty Kingdom Ltd $0.021 +23.53%
View all top gainers

Top Fallers

Code Company Last % Chg
GRE Greentech Metals Ltd $0.43 -27.73%
ONE Oneview Healthcar... $0.17 -27.66%
GSM Golden State Mini... $0.033 -21.43%
BXN Bioxyne Ltd $0.016 -20.00%
WYX Western Yilgarn NL $0.15 -18.92%
View all top fallers

52 Week Highs

Code Company Last % Chg
HVY Heavy Minerals Ltd $0.22 +100.00%
S2R S2 Resources Ltd $0.19 +18.75%
MLG MLG OZ Ltd $0.72 +15.20%
BOT Botanix Pharmaceu... $0.145 +11.54%
LLL Leo Lithium Ltd $1.22 +8.44%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
NOX Noxopharm Ltd $0.036 -14.29%
RNT Ltd $0.02 -9.09%
DGR DGR Global Ltd $0.034 -8.11%
AV1 Adveritas Ltd $0.042 -6.67%
GBZ GBM Resources Ltd $0.015 -6.25%
View all 52 week lows

Near Highs

Code Company Last % Chg
VLUE Vaneck MSCI Inter... $23.01 -0.43%
SEMI Global X Semicond... $11.40 -0.96%
SLA Silk Laser Austra... $3.31 -0.30%
NHF Nib Holdings Ltd $8.48 -0.59%
XARO Activex Ardea Rea... $24.45 -0.29%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
OZBD Betashares Austra... $42.67 -0.12%
GOVT SPDR S&P/ASX Aust... $23.01 -0.09%
CSL CSL Ltd $264.12 -1.04%
VBND Vanguard Global A... $40.47 -0.10%
APZ Aspen Group $1.67 -2.91%
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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