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

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.

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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

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Latest news

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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 (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 (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.

New Hope (Source: TradingView)

Northern Star (Source: TradingView)

Perseus Mining (Source: TradingView)

Evolution Mining (Source: TradingView)

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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 

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Broker updates 

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Scans