Market Wraps

Evening Wrap: ASX 200 hits four-week low, gold and coal outperform, US futures flat

Mon 19 Dec 22, 5:12pm (AEST)

The S&P/ASX 200 closed 15 points lower, down -0.21%.

The local sharemarket slumps to a four-week low – down 3.3% from December highs, resources outperformed on optimism over China's demand recovery, Macquarie upgrades Core Lithium to an Outperform from Neutral and a few stock charts of interest.

Let's dive in.


Today in Review

Mon 19 Dec 22, 4:26pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,133.9 -0.21%
All Ords 7,321.0 -0.21%
Small Ords 2,837.9 -0.06%
All Tech 2,071.6 -0.37%
Emerging Companies 2,106.5 +0.07%
Currency
AUD/USD 0.671 +0.33%
US Futures
S&P 500 3,881.75 +0.07%
Dow Jones 33,138.0 +0.03%
Nasdaq 11,355.0 +0.09%
Name Value % Chg
Sector
Energy 11,207.3 +0.52%
Materials 17,756.9 +0.45%
Consumer Staples 12,752.1 -0.02%
Communication Services 1,443.0 -0.06%
Information Technology 1,450.1 -0.17%
Financials 6,403.8 -0.33%
Consumer Discretionary 2,809.8 -0.59%
Utilities 8,001.1 -0.75%
Health Care 41,586.9 -0.84%
Industrials 6,438.9 -0.88%
Real Estate 3,072.9 -1.08%

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Markets

The Evening Wrap is looking a little sad as economic updates, company news and broker notes come to a grinding halt. The ASX 200 fell for a third straight session, wedged between hawkish central bankers and a mounting pile of weak economic data.

  • Materials led to the upside, with gold and coal names headlining the gains thanks to firmer spot prices

  • Energy was another top performer amid growing optimism for China's reopening and oil demand recovery, according to Reuters

    • "On Friday, news outlet Caixin reported that China's plans to increase flights was a goal to restore the country's average daily passenger flight volumes to 70% of 2019 levels by January 6."

    • "China, the world's top crude oil importer and No. 2 oil consumer, is experiencing its first of three expected waves of COVID-19 cases after Beijing relaxed mobility restrictions."

  • Defensive names like Industrials, Healthcare and Utilities underperformed

  • 105 of the top 200 declined (53%)

Economy

No major economic developments.

Commodities 

  • Copper +0.5% to US$3.78/lb

  • Iron ore futures -2.2% to US$108.90/t

  • WTI crude -2.4% to US$74.5/bbl


Latest news


Post market brief

As we noted in the Morning Wrap, the ASX 200 is starting to enter a bit of a snooze mode after lunch. The open was rather volatile, with the market falling to lows of -0.35% before a V-shaped rally back towards breakeven by 10:30 am AEDT.

There was another dip-and-rip kind of price action between the 10:30 am peak and noon before drifting mostly lower towards close.

XJO intraday chart
XJO intraday chart (Source: TradingView)

The ASX 200 is in a rather awkward place, trying to respect this 7,130 level. But we're still on a three day skid, down -1.6%.

XJO chart
XJO chart (Source: TradingView)

Resources was the place to be, most notably gold and coal. In summary:

  • Coal: Names are starting to break out after being bogged down by things like ex-dividend, production downgrades and selldowns (Whitehaven CEO sold 900,000 shares on 24 November).

  • Gold: Gold miners have had a pretty massive run from late September lows. Higher overnight spot prices helped several names push higher in early trade but many struggled to hold session highs (e.g. Northern Star closes 3.4% higher from high of 5.5%). Still, its a sector that's holding up relatively well, even as central bankers reiterate that there's still more hikes to come.

NHC chart
New Hope (Source: TradingView)
NST chart
Northern Star (Source: TradingView)
PRU chart
Perseus Mining (Source: TradingView)
EVN chart
Evolution Mining (Source: TradingView)

Major announcements

Larger caps (>$1bn)

  • Newcrest Mining (NCM) -0.3%: CEO Sandeep Biswas announced his retirement, with CFO Sherry Duhue to resume the role of interim CEO, effective today

Mid-to-small caps

  • MMA Offshore (MRM) +21.3%: Guided to 1H23 EBITA of $30-32m, up approximately 70% on the second half of FY22. The company said “market conditions during the first half have been stronger than anticipated.”

  • Perenti (PRN) +10.6%: Upgraded its FY23 EBITDA guidance from $215-230m to $230-250m. The company said it “secured improvements to commercial conditions across several Australian and African [mining] projects.” 

  • Warrego Energy (WGO) +6.7%: Notes that Strike Energy intends to make an off-market takeover to acquire all the shares in Warrego. Currently, Hancock Energy has a 28 cents per share bid for Warrego  

  • Alpha HPA (A4N) +6%: Commissioned its high purity aluminium precursor production facility and currently in ramp-up phase to full production capacity

  • Invictus Energy (IVZ) -1.7%: Encountered multiple zones of fluorescence and elevated gas shows at the Upper Angwa target 


Broker updates 

Ticker

Company

Broker

Action

Rating

Target price

AZJ

Aurizon Holdings

Morgans

Downgrade

Hold from Add

$4.00 from $4.20

CXO

Core Lithium

Macquarie

Upgrade

Outperform from Neutral

$1.30

IGO

IGO

Citi

Retain

Neutral

$17.20 from $15.20

NSR

National Storage REIT

Morgans

Retain

Hold

$2.15 from $2.30


Scans

Top Gainers

Code Company Last % Chg
MEI Meteoric Resource... $0.043 +37.10%
3DA Amaero Internatio... $0.14 +33.33%
NSM North Stawell Min... $0.16 +28.00%
GCM Green Critical Mi... $0.025 +25.00%
PXX Polarx Ltd $0.015 +25.00%
View all top gainers

Top Fallers

Code Company Last % Chg
99L 99 Loyalty Ltd $0.012 -25.00%
BNO Bionomics Ltd $0.045 -21.05%
DMM DMC Mining Ltd $0.085 -19.05%
HCD Hydrocarbon Dynam... $0.013 -18.75%
HIQ HITIQ Ltd $0.028 -17.65%
View all top fallers

52 Week Highs

Code Company Last % Chg
MEI Meteoric Resource... $0.043 +37.10%
GCM Green Critical Mi... $0.025 +25.00%
MRM Mma Offshore Ltd $0.955 +19.38%
PRN Perenti Ltd $1.19 +9.68%
WGO Warrego Energy Ltd $0.325 +8.33%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
BNO Bionomics Ltd $0.045 -21.05%
SGR The Star Entertai... $2.15 -16.67%
NNL Nordic Nickel Ltd $0.18 -16.28%
OPL Opyl Ltd $0.029 -14.71%
MEM Memphasys Ltd $0.012 -14.29%
View all 52 week lows

Near Highs

Code Company Last % Chg
SMLL Betashares Aust S... $3.46 0.00%
OZBD Betashares Austra... $44.38 -0.23%
PCI Perpetual Credit ... $1.01 +0.50%
WVOL Ishares Edge MSCI... $35.15 -0.73%
NUF Nufarm Ltd $6.12 +0.16%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
GAS State GAS Ltd $0.23 +12.20%
LEL Lithium Energy Ltd $0.77 +0.65%
CCX City Chic Collect... $0.595 -4.80%
BST Best & Less Group... $1.99 -0.50%
LPM Lithium Plus Mine... $0.40 0.00%
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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