Market Wraps

Evening Wrap: ASX 200 rallies, New Zealand hikes rates by another 75 bps, US futures flat

Wed 23 Nov 22, 4:38pm (AEST)

The S&P/ASX 200 closed 51 points higher, up 0.70%.

The local sharemarket rallied to another fresh seven month high led by value and resource sectors, New Zealand hiked interest rates by another 75 bps, US markets slow down for Thanksgiving and Fed minutes due on Thursday morning.

Let's dive in.


Today in Review

Wed 23 Nov 22, 4:21pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,231.8 +0.70%
All Ords 7,422.4 +0.62%
Small Ords 2,886.4 +0.48%
All Tech 2,074.5 -0.52%
Emerging Companies 2,204.7 +0.18%
Currency
AUD/USD 0.6637 -0.16%
US Futures
S&P 500 $4,007.5 -0.07%
Dow Jones $34,124.0 -0.01%
Nasdaq $11,726.25 -0.24%
Name Value % Chg
Sector
Utilities 8,483.8 +1.56%
Industrials 6,526.6 +1.30%
Energy 11,738.8 +1.27%
Materials 17,379.5 +1.03%
Financials 6,595.6 +0.71%
Consumer Staples 12,916.9 +0.68%
Consumer Discretionary 2,940.7 +0.48%
Communication Services 1,425.3 +0.48%
Health Care 42,902.2 +0.40%
Real Estate 3,063.9 -0.35%
Information Technology 1,445.2 -1.05%

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

Markets

The ASX 200 rallied for a second consecutive session, now down just -3% year-to-date from -14% in mid September.

  • Defensive sectors led to the upside, notably Utilities and Industrials

  • Energy also outperformed despite volatile oil prices, with traders weighing China's covid outbreak against Saudi Arabia rejecting the idea of an OPEC output hike

  • Materials rose almost 1.0% thanks to gains from BHP, South 32 and Gold Miners. Of note, Mineral Resources closed at a fresh all-time high

  • Technology was a clear outlier, weighed by an almost -7% dip from WiseTech Global, the largest tech stock

  • 125 of the top 200 rallied (63%)

Economy

New Zealand raised interest rates by 75 bps to 4.25%

  • In line with consensus expectations

  • "The office cash rate needs to reach a higher level, and sooner than previously indicated, to ensure inflation returns to within its target range over the medium term." - Reserve Bank of New Zealand

Australia's manufacturing PMI fell to 51.5 in November from 52.7 in October.

  • Below analyst expectations of 52.2

  • "... the private sector economy further contracted midway into the fourth quarter, faced with deteriorating demand conditions." - S&P Global

  • "That said, with price inflation further climbing in November, the pressure remains on the central bank to keep tightening monetary policy to rein in prices. This is also amid indications of solid employment growth from the PMI data."

Australia's services PMI slumped to 47.2 in November from 49.3 in October.

  • Below analyst expectations of 48.6

  • "In particular, the service sector continued to be affected by higher interest rates and capacity constraints, leading to a sharper fall in business activity." - S&P Global

  • “The mix of deteriorating demand and worsening price pressures does not bode well for the near-term outlook, and this has also been reinforced by the decline in private sector confidence in November.”

Commodities 

"A risk on tone across markets boosted sentiment across the commodity complex. This was further supported by ongoing supply side issues," said ANZ senior commodity strategist, Daniel Hynes.

  • Iron ore futures fell -0.4% to US$91.9/t


Latest news


Post market brief

Large cap names from Financials, Staples and Materials are pulling the market higher. But beneath the surface, things remain rather choppy.

Thanksgiving kicks off in the US on Thursday, which means we can expect rather subdued volumes. Here's an interesting but likely useless stat: Since 1950, the S&P 500 is up 80% of the time from the Tuesday before Thanksgiving to the 2nd trading day of the year the following year, with an average gain of 2.7%, according to AlmanacTrader.

SPX chart
S&P 500 chart (Source: TradingView)

The ASX 200 is running rather hard, without much consolidation after the recent rally. The good thing is that the VIX is currently 13.3, which indicates low volatility. At least from a technical perspective, set ups can work a little better.

XJO chart
XJO chart (Source: TradingView)

We have FOMC minutes due tomorrow morning, before the markets open. To-date, the Fed has stuck to its hawkish script. Does another hawkish blast by the Fed send markets lower? Or do we wake up to something on the slightly more dovish side?


Major announcements

Large caps (>$1bn)

  • Chalice Mining (CHN) +6.5% intersected ‘several outstanding broad zones of sulphide mineralisation’ of up to 650m beyond its current resource 

  • Qantas (QAN) +5.3% raised its half-year FY23 guidance to up to $1.45bn, up $150m from its trading update a month ago  

  • Shopping Centres Australasia (SCP) -0.7% AGM guided to FY23 funds from operations of 17 cents per share compared to 17.4 cents in FY22

  • Polynov (PNV) -8.9% successfully raised $30m at $1.90 per share, a 9.1% discount to its last close. Proceeds will be used to accelerate growth in the US and the rest of the world 

Mid-to-small caps

  • Talga Group (TLG) +8.8% said its Vittangi Anode Project has passed the European Investment Bank’s preliminary screening for debt financing, for up to 300m euros

  • PeopleIN (PPE) +8.4% responded to media speculation about a takeover and said a strategic review of the business is currently being undertaken

  • Macmahon Holdings (MAH) +7.1% received a notice of award for the load and haul services from Talison Lithium for the Greenbushes Lithium Project.  The seven-year contract is estimated to generate revenues of more than $1.1bn 

  • Dreadnought Resources (DRE) +0% delivered multiple zones of rare earth, niobium, titanium and phosphorus at its first pass RC drilling at the Mangaroon project

  • SmartGroup (SIQ) -2.9% earnings update guided to CY22 NPAT between $60-61m compared to $58m a year ago

  • Westgold Resources (WGX) -3.2% said its flagship Big Bell mine in WA is outperforming feasibility tonnages of 1m tonnes per annum since commercial production was declared in 3Q22. The company will nw kick off expansion studies to optimise cost and productivity    


Broker updates 

Ticker

Company

Broker

Rating

Target price

MND

Mondaelphous Group

Ord Minnett

Hold from Accumulate

$14.08 from $13.02

NAN

Nanosonics

Morgans

Add from Hold

$4.91

SGR

Star Entertainment

Macquarie

Neutral from Outperform

$3.05 from $3.50

TNE

TechnologyOne

Morgans

Hold from Add

$13.50 from $11.53


Scans

Top Gainers

Code Company Last % Chg
CDR Codrus Minerals Ltd $0.14 +102.90%
BSA BSA Ltd $0.074 +54.17%
MMC Mitre Mining Corp... $0.225 +32.35%
CML Chase Mining Corp... $0.018 +28.57%
PSC Prospect Resource... $0.17 +25.93%
View all top gainers

Top Fallers

Code Company Last % Chg
NEW NEW Energy Solar Ltd $0.193 -80.56%
EOF Ecofibre Ltd $0.335 -22.09%
BIM Bindi Metals Ltd $0.19 -20.83%
GBE Globe Metals & Mi... $0.071 -18.39%
MFB My Food Bag Group... $0.50 -16.67%
View all top fallers

52 Week Highs

Code Company Last % Chg
CDR Codrus Minerals Ltd $0.14 +102.90%
MMC Mitre Mining Corp... $0.225 +32.35%
IMI Infinity Mining Ltd $0.36 +24.14%
QAN Qantas Airways Ltd $6.19 +5.45%
IPG Ipd Group Ltd $3.16 +5.33%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
NEW NEW Energy Solar Ltd $0.193 -80.56%
MFB My Food Bag Group... $0.50 -16.67%
SIO Simonds Group Ltd $0.13 -13.33%
KED Keypath Education... $0.705 -12.96%
TRU Truscreen Group Ltd $0.035 -12.50%
View all 52 week lows

Near Highs

Code Company Last % Chg
OZBD Betashares Austra... $44.09 -0.11%
OD6 OD6 Metals Ltd $0.585 +2.63%
WVOL Ishares Edge MSCI... $35.84 +0.42%
NUF Nufarm Ltd $6.13 +3.20%
WBCPI Westpac Banking C... $103.59 +0.01%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
GNX GENEX Power Ltd $0.175 +2.94%
FAR FAR Ltd $0.72 -0.69%
CRYP Betashares CRYPTO... $1.80 +3.15%
BUB Bubs Australia Ltd $0.36 +1.41%
PGH Pact Group Holdin... $1.095 +0.92%
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.