Market Wraps

Evening Wrap: ASX 200 posts biggest drop this year led by banks, miners and energy stocks

Fri 10 Mar 23, 4:51pm (AEST)

The S&P/ASX 200 closed 166 points lower, down -2.28%.

The local sharemarket posts its first 2% fall for 2023, the Bank of Japan kept interest rates unchanged, lithium and bank stocks sell off sharply and a preview of tonight's high stakes jobs report.

Let's dive in.


Today in Review

Fri 10 Mar 23, 4:22pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,144.7 -2.28%
All Ords 7,348.2 -2.21%
Small Ords 2,810.0 -2.44%
All Tech 2,224.0 -1.74%
Emerging Companies 2,107.2 -1.41%
Currency
AUD/USD 0.6596 +0.09%
US Futures
S&P 500 3,893.75 -0.67%
Dow Jones 32,048.0 -0.65%
Nasdaq 11,951.75 -0.46%
Name Value % Chg
Sector
Utilities 8,245.2 +0.61%
Communication Services 1,480.5 -0.75%
Consumer Staples 13,174.3 -0.82%
Industrials 6,593.3 -0.98%
Health Care 42,156.6 -1.25%
Consumer Discretionary 3,000.5 -1.71%
Real Estate 3,110.3 -1.81%
Information Technology 1,533.8 -2.21%
Financials 6,239.1 -2.78%
Materials 17,731.2 -3.13%
Energy 10,662.9 -3.36%

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ASX 200 Session Chart

XJO chart
A full day of selling (Source: TradingView)

Markets

What an ugly market. The ASX 200 has nosedived to two month lows, the US market is rolling over and we've still got to survive another two major catalysts (US jobs and inflation).

  • Resources sold off aggressively, with commodity prices generally weaker (except iron ore) and oil prices down 6.7% in the last four sessions

  • Financials tumbled, potentially compounded by the Silvergate Capital's collapse

    • Interesting line from Bloomberg: "Silvergate's troubles are as much if not more about traditional bank risks – lack of diversification, maturity mismatches – as it is about its exposure to crypto."

  • Defensive sectors including Utilities, Telcos and Staples outperformed

Economy

The Bank of Japan kept interest rates unchanged at -0.1% and kept the band around its 10-year yield target at +/-0.5%.


Latest news


Market Insights

Talking Technicals: It looks bullish if you invert it

This is an inverted ASX 200 daily chart and you can't tell me it doesn't look like a pretty clean breakout.

XJO inverted
ASX 200 inverted (Source: TradingView)

The four green days from earlier this week reminds me of how the market was trading last year: A few good days followed by sharp and volatile downward moves. We're now back to an all too familiar place where:

  • Is the market oversold? Increasingly yes.

  • Is the market due to bounce? As it gets more oversold, yes.

  • What about momentum? Down.

In Thursday's Evening Wrap, I noted how lithium stocks like Pilbara Minerals are trying to bottom around the 200-day moving average. Today, Pilbara Minerals got slammed -7.0%. It goes to show a) I might be Jim Kramer and b) how volatile and difficult the markets are right now. Stay safe.

A high-stakes US jobs report

Brace yourself for another market moving catalyst: US nonfarm and unemployment. Here's what the experts are thinking:

  • Consensus: non-farm payrolls up 205,000 and unemployment unchanged at 3.4%

  • Morgan Stanley: "We expect nonfarm payrolls increased by 190,000 in February with an uptick in participation ... which should keep the unemployment rate at 3.4% ... We expect average hourly earnings to increase by 0.3% month-on-month, raising the year-over-year rate to 4.7%."

  • Goldman Sachs: "We estimate non-farm payrolls rose by 250,000 in February, above consensus of 225,000 ... we believe because some firms front-load spring hiring in anticipation of spring labour shortages and all four Big Data employment indicators we track were indeed strong."


Interesting news and movers

Trading higher

  • +8.8% Volpara Health (VHT) – FDA reporting rule released

  • +6.4% Silex Systems (SLX)

  • +2.1% Cash Converters (CCV)

Trading lower

  • -24.6% Atlantic Lithium (A11) – Short report

  • -7.2% IGO (IGO)

  • Lithium sector move: Allkem (-8.6%), Sayona Mining (-8.0%), Liontown Resources (-8.0%) and Pilbara Minerals (-7.0%)

  • Banking sector move: Commonwealth Bank (-3.2%), NAB (-3.2%), ANZ (-2.8%) and Westpac Bank (-2.6%)


Broker updates

Some more standalone Macquarie notes:

29Metals (29M): Underperform with $1.30 target price

  • “The troubles continue for 29M with one of their two mines suspended. We view that downside risks have increased with the possibility of a guidance downgrade on the horizon due to Capricorn issues.”

  • CY23 copper production forecast downgraded to 33,800 tonnes (vs. company guidance of 36-43,000 tonnes)

Steadfast Group (SDF): Outperform with $6.50 target price

  • "The premium rate cycle remains exceptionally strong, supporting our Outperform recommendation.”

Xero (XRO): Neutral with $90.00 target price 

  • “Positive announcement from XRO and reflects the first step in a leaner, more efficient business model under the new CEO.”

  • “The key unknown remains the pace of subscriber growth under the new cost structure.”


Scans

Top Gainers

Code Company Last % Chg
MGU Magnum Mining and... $0.024 +56.67%
WOO Wooboard Technolo... $0.012 +50.00%
MBK Metal Bank Ltd $0.029 +38.10%
SMN Structural Monito... $0.45 +26.76%
PKD Parkd Ltd $0.023 +21.05%
View all top gainers

Top Fallers

Code Company Last % Chg
TTA TTA Holdings Ltd $0.017 -26.09%
A11 Atlantic Lithium Ltd $0.49 -24.62%
PYR Payright Ltd $0.028 -20.00%
BNO Bionomics Ltd $0.035 -18.61%
DES Desoto Resources Ltd $0.125 -16.67%
View all top fallers

52 Week Highs

Code Company Last % Chg
BOT Botanix Pharmaceu... $0.099 +20.73%
KSC K & S Corporation... $2.55 +5.81%
JXT Jaxsta Ltd $0.064 +3.23%
ORG Origin Energy Ltd $8.35 +2.45%
XCO2 Vaneck Global Car... $24.20 +1.77%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
A11 Atlantic Lithium Ltd $0.49 -24.62%
PYR Payright Ltd $0.028 -20.00%
EMS Eastern Metals Ltd $0.061 -15.28%
ASQ Australian Silica... $0.045 -13.46%
ADC Acdc Metals Ltd $0.13 -13.33%
View all 52 week lows

Near Highs

Code Company Last % Chg
WVOL Ishares Edge MSCI... $34.73 -1.45%
STX Strike Energy Ltd $0.395 -1.25%
HLTH Vaneck Global Hea... $10.29 -1.15%
PMGOLD Gold Corporation $27.68 +1.06%
VVLU Vanguard Global V... $62.56 -2.92%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
SDG Sunland Group Ltd $1.325 -1.85%
WSP Whispir Ltd $0.31 -3.13%
OBL Omni Bridgeway Ltd $2.62 -1.50%
PSQ Pacific Smiles Gr... $1.21 +4.76%
CUP Countplus Ltd $0.60 +10.09%
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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