Market Wraps

Evening Wrap: ASX 200 on a three-day losing streak, lithium stocks smashed, Woodside tumbles

Thu 08 Dec 22, 5:00pm (AEST)

The S&P/ASX 200 closed 54 points lower, down -0.75%.

The local sharemarket extends its losing streak to three, defensive sectors held up relatively well and lithium stocks sold off after Goldman Sachs warned prices may fall in the second half of 2023.

Let's dive in.


Today in Review

Thu 08 Dec 22, 4:27pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,175.5 -0.75%
All Ords 7,369.4 -0.73%
Small Ords 2,852.2 -0.51%
All Tech 2,057.5 -0.67%
Emerging Companies 2,146.4 -0.06%
Currency
AUD/USD 0.6712 -0.18%
US Futures
S&P 500 3,931.5 -0.13%
Dow Jones 33,596.0 -0.09%
Nasdaq 11,485.0 -0.21%
Name Value % Chg
Sector
Utilities 8,462.8 +0.82%
Real Estate 3,078.0 +0.46%
Consumer Staples 12,731.4 +0.23%
Consumer Discretionary 2,874.1 +0.12%
Information Technology 1,417.8 -0.40%
Health Care 42,695.6 -0.58%
Industrials 6,403.6 -0.73%
Communication Services 1,440.8 -0.77%
Materials 18,063.0 -0.90%
Financials 6,404.9 -0.96%
Energy 10,783.4 -2.73%

Enjoying the Evening Wrap? Sign up to get it sent directly to your inbox after every trading day.

Markets

The ASX 200 is down -2.05% in the last three sessions with no bounce in sight. We're seeing a rotation towards defensive and value pockets of the market, given the outperformance of sectors like Utilities and Staples.

  • Three defensive sectors lead to the upside: Utilities, Real Estate and Staples

  • Tech surprisingly held up relatively well, down just -0.40%

  • Financials weighed on the Index, down almost 1.0%. Notable declines include NAB (-1.6%), ANZ (-1.7%) and Macquarie (-1.4%)

  • Energy was the worst performing sector as oil prices hit a 12-month low

  • 115 of the Top 200 declined (58%)

Economy

Australia’s trade surplus eased to $12.2bn in October from $12.4bn in September. 

  • Goods and services credits (exports) fell $568m (0.9%) driven by non-monetary gold

  • Goods and services debits (imports) fell $340m (0.7%) driven by Fuels and lubricants

Commodities 

"China optimism continued to boost sentiment across commodity markets, aided by a weaker USD. This helped shrug off concerns of broader weaker economic growth amid central bank tightening,” said ANZ senior commodity analyst, Daniel Hynes. 

  • Iron ore futures +1.9% to US$107.8

  • Brent crude +0.5% to US$77.8


Latest news


Post market brief

We talked about the pullback being just as important as the rally and so far, it's been pretty ugly. The ASX 200 has closed around session lows three days in a row.

XJO chart
XJO chart (Source: TradingView)

The market has U-turned from "Yay a Powell pivot" to "oh dear a recession is coming" rather quick. This is proving a little troublesome given the ASX 200 was trading at a rather extended level. We're searching for a floor, but downside momentum continues to build.

A quick note on:

Lithium: Lithium stocks are struggling to find support and Goldman Sachs is only adding further insult to injury. The note today said spot prices could begin to fall in the second half of 2023 on the back of decelerating EV demand. We're seeing a big name like Allkem pullback to this low $13.00 area, which has proven to be a key area of support in the past. Can it muster up a bounce or does it break down from here?

Allkem chart
Allkem chart (Source: TradingView)

Oil: Woodside is pulling back sharply as oil prices deteriorate. You can see the trend get hit pretty hard from Thursday's selloff, with the 20-day firmly pointing downwards and the 50-day begin to turn.

Woodside chart
Woodside chart (Source: TradingView)

Major announcements

Large caps (>$1bn)

  • Chalice Mining (CHN) +13.1%: Hit significant PGE-dominant sulphide mineralisation in initial drilling at the greenfield Hooley Prospect, 5km north of its Julimar Project in WA   

  • Transurban (TCL) +1.2%:  Successfully raised $425m of debt via a 10-year institutional term loan facility 

  • HomeCo Daily Needs REIT (HDN) +0.8%: Plans to acquire Southland Boulevarde, a ‘rare triple supermarket’ in metropolitan Perth for $92.5m and reaffirmed its FY23 guidance  

  • Air New Zealand (AIZ) +0.4%: Upgraded its 1H23 guidance to $295-325m from $220-275m and assumes to fly approximately 75% of pre-covid capacity

  • Downer EDI (DOW) -20.4%: Reported ‘accounting irregularities’ that overstated recent earnings by up to $40m. The company also downgraded its FY23 guidance due to difficult weather conditions and elevated costs 

Mid-to-small caps

  • Fonterra Shareholders Fund (FSF) +2.75%: Upgraded its earnings per share guidance to 50-70 cents from 45-60 cents 

  • Neometals (NMT) -3.1%: Issued SMS Group a 50% equity interest in the company’s battery recycling IP holding company to accelerate its commercial activities

  • Latin Resources (LRS) -10.4%:  Posted the Maiden Mineral Resource Estimate for its Colina Prospect. The project has a deposit of 1.3.3m tonnes at 1.2% lithium  

Capital raisings

  • Renascor Resources (RNU) -3.1%: Successfully raised $70m at 27.5 cents per share, a 14.1% discount to its pre-raise close  


Broker updates 

Ticker

Company

Broker

Rating

Target price

AGL

AGL Energy

Credit Suisse

Outperform

$9.60 from $8.20

BHP

BHP

Morgans

Hold from Add

$44.80 from $47.00

NIC

Nickel Industries

Citi

Neutral

$1.10 from from 90 cents

ORG

Origin Energy

Credit Suisse

Outperform from Neutral

$9.00 from $6.20

QAN

Qantas Airways

Morgans

Add

$8.50

RIO

Rio Tinto

Morgans

Hold from Add

$107 from $108


Scans

Top Gainers

Code Company Last % Chg
AHN Athena Resources Ltd $0.011 +46.67%
PMT Patriot Battery M... $1.80 +41.18%
IBX Imagion Biosystem... $0.033 +32.00%
GMN Gold Mountain Ltd $0.011 +31.25%
SGA Sarytogan Graphit... $0.495 +26.92%
View all top gainers

Top Fallers

Code Company Last % Chg
DOW Downer Edi Ltd $3.785 -21.15%
WIN Widgie Nickel Ltd $0.405 -20.59%
ZAG Zuleika Gold Ltd $0.02 -16.67%
GLH Global Health Ltd $0.22 -15.39%
SP3 Spectur Ltd $0.029 -14.71%
View all top fallers

52 Week Highs

Code Company Last % Chg
PMT Patriot Battery M... $1.80 +41.18%
WR1 Winsome Resources... $1.515 +10.58%
MMC Mitre Mining Corp... $0.30 +7.14%
ACF Acrow Formwork an... $0.62 +5.09%
STX Strike Energy Ltd $0.375 +2.74%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
DOW Downer Edi Ltd $3.79 -21.04%
SP3 Spectur Ltd $0.029 -14.71%
CVL Civmec Ltd $0.55 -12.00%
EPM Eclipse Metals Ltd $0.015 -11.77%
ICG Inca Minerals Ltd $0.024 -11.11%
View all 52 week lows

Near Highs

Code Company Last % Chg
NDIA Global X India Ni... $62.20 +0.05%
SMLL Betashares Aust S... $3.46 -0.86%
OZBD Betashares Austra... $44.77 +0.13%
PCI Perpetual Credit ... $0.97 0.00%
WVOL Ishares Edge MSCI... $35.57 -0.48%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
PEN Peninsula Energy Ltd $0.125 0.00%
KSL Kina Securities Ltd $0.775 -3.13%
DUN Dundas Minerals Ltd $0.20 +2.56%
QPM Queensland Pacifi... $0.118 +2.17%
MGTDB Magnetite Mines Ltd $0.635 -5.22%
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.

Get the latest news and insights direct to your inbox

Subscribe free

Get free post-market insights with our Evening Wrap

Create an account to receive our concise, data-driven post-market recap, sent directly to your inbox, every day.

Along with the Evening Wrap, you'll join 100k+ investors who receive our Morning Wrap and Weekend Newsletter.