Evening Wrap: ASX 200 rebounds on blue chip buying spree, WOW, CBA, NAB, WES and TLS top investor shopping lists

The S&P/ASX 200 closed 99.4 points higher, up 1.17%.

The ASX 200 rebounded after President Trump called off planned military strikes on Iran, pushing oil lower and steadying benchmark bond yields. This triggered a rotation into defensive stocks, with consumer staples, healthcare and the big banks all advancing strongly. Materials and technology stocks found fewer buyers.

Be sure to click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key economic data in tonight's Evening Wrap. Also, I have detailed technical analysis on the Nasdaq Composite and the S&P/ASX 200 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 99.4 points higher at 8,604.7, 1.2% from its session low and smack–bang on its session high. In the broader-based S&P/ASX 300 (XKO) advancers blew past decliners by a tidy 206 to 77 — a 180 degree reversal from yesterday!

Consumer Staples (XSJ) (+3.0%) was the session's best performer as investors rotated into defensives — with the feared Wall Street overnight collapse not materialising, fund managers added risk — but cautiously. They picked over high-quality blue chips, while largely overlooking cyclicals.

Lower oil prices easing cost-of-living pressure reinforced the sector's appeal. Woolworths (WOW) (+3.7%) led, aided by a JPMorgan upgrade to Overweight with a price target lift to $37.00. Treasury Wine Estates (TWE) (+3.3%), Coles (COL) (+2.7%), and Metcash (MTS) (+2.7%) were all firmer.

Communication Services (XTJ) (+2.7%) found buyers in the same defensive rotation — the sector's stalwart blue-chip names, with their predictable earnings and reliable dividends, fit the "add risk conservatively" theme. CAR Group (CAR) (+3.7%), Seek (SEK) (+3.4%), and Telstra (TLS) (+2.6%) all advanced.

Health Care (XHJ) (+1.9%) had a rare strong session, again consistent with the defensive rotation. Pro Medicus (PME) (+3.8%), CSL (CSL) (+2.6%), Ramsay Health Care (RHC) (+2.8%), and Cochlear (COH) (+2.0%) all recovered ground lost earlier in the week.

Real Estate (XPJ) (+1.8%) was one of the session's biggest beneficiaries as benchmark bond yields retreated from Monday's multi-year highs — when yields fall, the income streams of property trusts become relatively more attractive, drawing buyers back. Goodman Group (GMG) (+2.7%) and Stockland (SGP) (+2.2%) were among the stronger movers.

Financials (XFJ) (+1.7%) also recovered alongside bond yield retreat, with the big four banks each adding more than 1.3%. AMP (AMP) (+2.9%) and QBE Insurance (QBE) (+2.9%) led as the insurance sector shone. In the Big 4, National Australia Bank (NAB) (+2.0%), Westpac (WBC) (+1.9%), Commonwealth Bank (CBA) (+1.3%), and ANZ (ANZ) (+1.3%) were all firmer.

Consumer Discretionary (XDJ) (+1.5%) gained as the modest decline in oil prices eased cost-of-living pressure and lifted consumer sentiment. Domino's Pizza Enterprises (DMP) (+4.9%), Propel Funeral Partners (PFP) (+4.8%), and Wesfarmers (WES) (+2.4%) were the standout movers.

Energy (XEJ) (+0.5%) was firmer despite ICE Brent crude futures falling 1.9% to US$109.98/bbl, with oil and gas names broadly lower but coal stocks surging as globalCoal Newcastle coal futures gained 1.2% to $140.45/t. New Hope Corp. (NHC) (+3.6%), Yancoal Australia (YAL) (+2.7%), and Whitehaven Coal (WHC) (+1.4%) were standouts.

Uranium stocks were mixed — Paladin Energy (PDN) (+2.4%) bucked the trend while Bannerman Energy (BMN) (-1.9%) and Boss Energy (BOE) (-1.2%) were softer, tracking a 1.2% decline in COMEX uranium futures to US$85.15/lb.

Information Technology (XIJ) (-0.4%) tracked weakness in Nasdaq-listed AI infrastructure stocks on Monday. Technology One (TNE) (-2.9%) was the worst performer after a first-half profit miss on foreign currency headwinds. Megaport (MP1) (-2.1%) and Life360 (360) (-1.2%) also fell.

Materials (XMJ) (-0.1%) was near-flat, masking divergence within the sector. COMEX copper futures fell a further 0.7% to US$6.27/lb and SGX iron ore futures slipped 0.9% to US$107.30/t — their fourth consecutive daily decline, now more than 4% below last week's two-year high.

Fortescue (FMG) (-0.3%), Rio Tinto (RIO) (-0.2%), and BHP (BHP) (-0.1%) were all marginally lower, though RIO and BHP closed well above their session lows (+1.7% and +1.5% respectively) — suggesting active value buying. South32 (S32) (+0.7%), Alcoa (AAI) (+0.5%), and Sandfire Resources (SFR) (-0.3%) rounded out the base metals names.

The Gold Sub-Index (XGD) (0.0%) closed flat as COMEX gold futures fell 0.3% to US$4,546/oz and COMEX silver futures eased 0.8% to US$78.55/oz — modest moves that left the sector directionless. Predictive Discovery (PDI) (-7.7%) and St Barbara (SBM) (-2.4%) were the notable decliners; Northern Star Resources (NST) (-0.7%) was also softer.

Rare earths and lithium stocks extended their recent pullback. NdPr in China eased 0.5% to CNY 711,500/t, with Lynas Rare Earths (LYC) (-4.3%) and Arafura Rare Earths (ARU) (-1.6%) both lower.

GFEX lithium carbonate futures fell 3.9% to CNY 184,060/t and Australian spodumene concentrate dropped 2.0% to US$2,745/t — their fifth consecutive session of declines from recent multi-year highs. Liontown Resources (LTR) (-3.9%), Vulcan Energy Resources (VUL) (-3.4%), Develop Global (DVP) (-2.5%), Pilbara Minerals (PLS) (-1.3%), and IGO (IGO) (-1.3%) were all lower.

Today's best gainers in the ASX 300

Today's worst losers in the ASX 300

ChartWatch

Nasdaq Composite Index

Analysis

Yep, not terrible on Monday — despite the headlines clamouring for a far more severe reaction to recent moves in the bond market.

Let’s say you’ve been in a monster uptrend, and a point of supply has just been set.

We’d expect some profit taking. Yet, if the reasons that drove the monster uptrend remain in place, we’d also expect the pullback to be shallow and quick. We’d also expect it to be well supported by a demand side managing their FOMO and their recent indoctrination by the market that BTD = the best approach.

That all sounds very normal and very encouraging, right?

Well, consider the chart above: Monster uptrend. A point of supply has just been set. Two modest supply side oriented candles… Neither particularly large nor manifesting highly motivated supply. Monday’s candle also has the tell-tale downward pointing shadow we associate with BTD. The dip buying occurred near a previous, defined point of demand (25739). ✅

Volume was again above average — we continue to see above average demand- and supply side engagement. We’ve found supply, we know that — but the demand side has not run away, they appear resilient in their desire to convert safe cash to risk in the form of stock ownership.

Just think about that for a second. No doubt there’s a dozen things holding you back from adding risk right now. Granted, you’re probably investing in primarily in an Old Tin Pot and not a proper market like they have in the US! It’s easier to see a path to owning a stock like NVIDIA, for example, than perhaps say Endeavour Group. But there are risks that are ubiquitous, nonetheless.

And yet the demand side remains prepared to soak up risk.

I’m pretty happy with what I see above, so I see little reason to panic — nor change my current US portfolio risk settings.

Still, the future is unwritten, and we must be prepared for a ramping in supply side motivation and engagement, and possibly the ensuing departure of demand side resolve. How will we know when this has occurred? 🤔

Easy:

• Black candles and or upward pointing shadows = fingerprints of excess supply, the longer, the greater the supply side’s motivation

• A lower peak to 26708 = breakdown of FOMO, breakdown of HOFU, sellers increasing motivation, increased supply

• Close below 25739 = breakdown of BTD, breakdown of HOFU, sellers increasing motivation, increased supply

• Close below the short term uptrend ribbon = supply side in control of short term price

We have a plan. We know the parameters for adding or reducing risk. There is nothing to do but await the next candle to Analyse. We Accept each outcome. We Act accordingly each time to manage our risk.

I mean, how else would one do it!? 🤷

View

FRP (RP = Risk Position — it reflects my personal allowable capital allocation limit for my investments in US stocks. So 1/2RP is 50%, 2/3RP is 67% and FRP is 100% 🪣). I don't know what's going to happen next, only that right now, the chart above remains a picture of excess demand.

Key levels

26708 is the key point of supply. 25739 is the closest point of demand, then there's the short term uptrend ribbon (presently 24473-25052). If the price closes back below this range, the supply-side is very likely back in control of the Comp's price.

S&P/ASX 200 (XJO)

Analysis

That’d be right! Moving to 1/3RP, next day, the OTP finds an up-day! 🤦

It is what it is. RP changes are incremental. They’re a target to be achieved over the next week or so.

Nothing changes after today's demand side candle. Sure, it’s decent — about average in size, with a close near enough to the high of the session to be deemed ‘sustained excess demand into the close’.

But… it didn’t undo yesterday’s supply side showing, and volume was unimpressive — only modest demand side engagement… That means little supply side engagement, also, possibly because supply is exhausted or possibly because they’re just taking a breather before the next hit…

We shall see.

Either way, today’s candle has changed nothing with respect to the prevailing set of techincals… Check box time!

• ST Trend = ⬇️ + price is below ST trend ribbon + ST trend ribbon acting as zone of dynamic demand ❌

• LT Trend = ➡️ + price is below ST trend ribbon + ST trend ribbon acting as zone of dynamic demand ❌

• Price action = 📉 ❌

• Candles = ⬛ + ⬆️shadows ❌

❌❌❌❌ = 👎

View

I remain 1/3RP 🪣 on the OTP (i.e., my personal allowable capital allocation limit for my investments in Australian stocks is 33%). Slow roll to get there (from previous 1/2RP).

Key levels

The short- and long-term downtrend ribbons (presently 8686-8750) combine to represent the key zone of supply. Beyond that, it's the not so lucky 8888 level! Demand is the 8262-8379 zone. Below that... 😱!

(Glossary of acronyms! Old Tin Pot (OTP): S&P/ASX 200 | MOTN: More Often Than Not | FOMO: Fear Of Missing Out | HOFU: Holding On For Upside | BTD: Buy The Dip | STR: Sell The Rally | RP: Risk Position)

Economy

Today

• AUS May Westpac Consumer Sentiment

• Result: +3.5% to 83 vs -12.5% in April

• Takeaways:

  • Rebound from initial fuel price spike plunge in confidence

  • Budget viewed as a modest net negative

  • Job loss fears remain elevated

  • Overall, consumers remain "deeply pessimistic" (100 = neutral, vs +/- 100 = optimistic/pessimistic)

  • "Disturbingly, ‘economy, next 12 months’ and ‘economy, next 5 years’ sub-indexes dipped 1.5% to 74.2 and 2.2% to 89.3 respectively. This marks the weakest combined read since November 2022." — Matthew Hassan, Westpac Head of Australian Macro-Forecasting

Later this week

Tuesday

• 22:00 USA April Pending Home Sales (+1.2% m/m forecast vs +1.5% in March)

Wednesday

• 09:00 CHN Peoples Bank of China (PBOC) Official Interest Rates Decision

  • 1-y Loan Prime Rate: no change at +3.0% p.a. forecast

  • 5-y Loan Prime Rate: no change at +3.5% p.a. forecast

Thursday

• 02:00 US Federal Reserve May FOMC meeting minutes

• AUS April Employment Data

  • Employment Change: +15,700 vs +17,900 in March

  • Unemployment Rate: unchanged at 4.3% forecast

• 21:45 USA Flash May Purchasing Managers Index (PMI)

  • Manufacturing: 53.6 forecast vs 54.5 in April

  • Services: 51.1 forecast vs 51.0 in April

Friday

• No major economic data are scheduled for release this day

Latest News

Interesting Movers

Trading higher

• +21.7% Northern Minerals (NTU) - backed Treasurer Jim Chalmers' order for six Chinese-linked shareholders to divest their stakes, saying the move was in Australia's national interest — a reversal of tone from the prior session's uncertainty around the FIRB direction.

• +17.6% Tuas (TUA) - partially rebounded from Monday's 62.8% crash; Singapore regulator IMDA's investigation into possible unauthorised use of radio frequency bands by its Simba mobile brand, which triggered the suspension of the proposed Simba-M1 merger review, remained the live issue.

• +6.8% ALS Limited (ALQ) - five of six brokers surveyed retained buy-or-buy-equivalent ratings following yesterday's full-year results release, reversing the prior session's weakness.

• +6.0% Ora Banda Mining (OBM) - UBS upgraded to Buy from Neutral and lifted its price target to $1.60 from $1.40.

• +3.7% Woolworths Group (WOW) - JPMorgan upgraded to Overweight from Neutral and lifted its price target to $37.00 from $35.00.

• +2.2% Elders (ELD) - CLSA upgraded to Outperform from Hold following yesterday's first-half results.

• +2.0% Bellevue Gold (BGL) - mined first ore from its high-grade Deacon North underground area on schedule, with the combined output from Deacon North and adjacent Deacon Main expected to support stable production for FY27 and beyond.

• +1.1% Superloop (SLC) - flagged its employee share plan trust would acquire up to 4.5 million shares on-market to satisfy performance rights.

Trading lower

• -8.8% 4DMedical (4DX) - a study published in the American Journal of Respiratory and Critical Care Medicine found CT:VQ-guided patient selection delivered a 76% response rate to lung volume reduction surgery versus the current 46% rate; the stock fell despite the clinically positive finding.

• -2.9% Technology One (TNE) - first-half profit fell short of analyst expectations due to foreign currency headwinds.

Broker Moves

Alcidion Group (ALC)

• Retained at buy at Bell Potter; Price Target: $0.16

Ampol (ALD)

• Retained at overweight at Morgan Stanley; Price Target: $35.00

ALS (ALQ)

• Retained at buy at Bell Potter; Price Target: $26.00 from $28.00

• Retained at underweight at Jarden; Price Target: $18.90 from $18.10

• Retained at outperform at Macquarie; Price Target: $23.50

• Retained at accumulate at Ord Minnett; Price Target: $23.20 from $23.95

• Retained at sector perform at RBC Capital Markets; Price Target: $23.50 from $22.50

• Retained at buy at UBS; Price Target: $27.00 from $26.00

AMP (AMP)

• Retained at overweight at Morgan Stanley; Price Target: $1.85

ANZ Group Holdings (ANZ)

• Retained at overweight at Morgan Stanley; Price Target: $36.20

Alicanto Minerals (AQI)

• Initiated at speculative buy at Canaccord Genuity; Price Target: $3.35

ARB Corporation (ARB)

• Downgraded to neutral from positive at E&P; Price Target: $18.10 from $33.41

Brazilian Rare Earths (BRE)

• Retained at speculative buy at Ord Minnett; Price Target: $6.25

BlueScope Steel (BSL)

• Retained at equal-weight at Morgan Stanley; Price Target: $29.00

Brambles (BXB)

• Retained at hold at CLSA; Price Target: $18.30 from $24.90

• Retained at overweight at Jarden; Price Target: $23.50 from $25.15

• Retained at neutral at JPMorgan; Price Target: $19.50 from $24.20

• Retained at neutral at Macquarie; Price Target: $18.60 from $23.35

• Retained at overweight at Morgan Stanley; Price Target: $28.00

• Downgraded to hold from accumulate at Morgans; Price Target: $18.70 from $25.50

• Upgraded to buy from neutral at UBS; Price Target: $23.80 from $25.40

Challenger (CGF)

• Retained at buy at Ord Minnett; Price Target: $9.85

Charter Hall Group (CHC)

• Retained at overweight at Morgan Stanley; Price Target: $26.89

Coles Group (COL)

• Retained at neutral at JPMorgan; Price Target: $24.10 from $24.00

• Retained at overweight at Morgan Stanley; Price Target: $23.90

CSL (CSL)

• Retained at overweight at Morgan Stanley; Price Target: $166.00

Domino's Pizza Enterprises (DMP)

• Retained at underweight at Morgan Stanley; Price Target: $15.20

Deterra Royalties (DRR)

• Retained at overweight at Morgan Stanley; Price Target: $4.45

Elders (ELD)

• Retained at buy at Bell Potter; Price Target: $6.45 from $9.00

• Downgraded to hold from buy at Canaccord Genuity; Price Target: $5.34 from $8.64

• Retained at buy at Citi; Price Target: $6.50 from $8.45

• Upgraded to outperform from hold at CLSA; Price Target: $6.30 from $7.35

• Retained at outperform at Macquarie; Price Target: $7.50 from $8.50

• Retained at buy at Morgans; Price Target: $7.90 from $8.65

Fortescue (FMG)

• Retained at underweight at Morgan Stanley; Price Target: $18.85

Gemlife Communities Group (GLF)

• Retained at overweight at Morgan Stanley; Price Target: $5.40

Goodman Group (GMG)

• Retained at overweight at Morgan Stanley; Price Target: $36.15

Gentrack Group (GTK)

• Retained at buy at Bell Potter; Price Target: $5.70 from $5.60

• Retained at equal-weight at Morgan Stanley; Price Target: $3.35

• Retained at hold at Ord Minnett; Price Target: $3.46

IGO (IGO)

• Retained at underweight at Morgan Stanley; Price Target: $6.85

Iluka Resources (ILU)

• Retained at overweight at Morgan Stanley; Price Target: $7.95

Megaport (MP1)

• Retained at buy at Morgans; Price Target: $15.50 from $13.50

Macquarie Group (MQG)

• Retained at overweight at Morgan Stanley; Price Target: $263.00

National Australia Bank (NAB)

• Retained at underweight at Morgan Stanley; Price Target: $37.20

New Hope Corporation (NHC)

• Retained at outperform at Macquarie; Price Target: $7.00

• Retained at hold at Morgans; Price Target: $5.25 from $5.00

• Retained at lighten at Ord Minnett; Price Target: $4.90

Ora Banda Mining (OBM)

• Retained at buy at Argonaut Securities; Price Target: $2.20 from $1.90

• Retained at buy at Canaccord Genuity; Price Target: $2.25 from $1.75

• Retained at buy at Euroz Hartleys; Price Target: $2.05 from $1.92

• Retained at outperform at Macquarie; Price Target: $1.70

• Retained at buy at Moelis Australia; Price Target: $1.70

• Retained at buy at Ord Minnett; Price Target: $2.50

• Upgraded to buy from neutral at UBS; Price Target: $1.60 from $1.40

Orica (ORI)

• Retained at overweight at Morgan Stanley; Price Target: $28.00

Paladin Energy (PDN)

• Retained at overweight at Morgan Stanley; Price Target: $13.65

PLS Group (PLS)

• Retained at equal-weight at Morgan Stanley; Price Target: $5.60

Qube Holdings (QUB)

• Retained at equal-weight at Morgan Stanley; Price Target: $5.15

REA Group (REA)

• Retained at overweight at Morgan Stanley; Price Target: $230.00

Rio Tinto (RIO)

• Retained at equal-weight at Morgan Stanley; Price Target: $171.50

South32 (S32)

• Retained at overweight at Morgan Stanley; Price Target: $4.85

Scentre Group (SCG)

• Retained at overweight at Morgan Stanley; Price Target: $4.44

SEEK (SEK)

• Retained at overweight at Morgan Stanley; Price Target: $21.00

SGH (SGH)

• Retained at overweight at Morgan Stanley; Price Target: $50.00

Sigma Healthcare (SIG)

• Retained at overweight at Morgan Stanley; Price Target: $3.30

Serko (SKO)

• Retained at buy at Citi; Price Target: $2.85

Service Stream (SSM)

• Retained at buy at Ord Minnett; Price Target: $2.56 from $2.50

Santos (STO)

• Retained at equal-weight at Morgan Stanley; Price Target: $7.50

Suncorp Group (SUN)

• Retained at overweight at Morgan Stanley; Price Target: $21.60

Southern Cross Gold Consolidated (SX2)

• Retained at buy at Shaw and Partners; Price Target: $14.40

Transurban Group (TCL)

• Retained at equal-weight at Morgan Stanley; Price Target: $14.18

The Lottery Corporation (TLC)

• Retained at equal-weight at Morgan Stanley; Price Target: $5.70

Telstra Group (TLS)

• Retained at overweight at Morgan Stanley; Price Target: $5.40

True North Copper (TNC)

• Retained at speculative buy at Morgans; Price Target: $1.30 from $1.20

Tuas (TUA)

• Retained at overweight at Morgan Stanley; Price Target: $10.00

Westpac Banking Corporation (WBC)

• Retained at underweight at Morgan Stanley; Price Target: $34.00

Woodside Energy Group (WDS)

• Retained at underweight at Morgan Stanley; Price Target: $28.00

WEB Travel Group (WEB)

• Retained at outperform at Macquarie; Price Target: $4.34 from $6.85

Wesfarmers (WES)

• Retained at equal-weight at Morgan Stanley; Price Target: $79.30

Woolworths Group (WOW)

• Upgraded to overweight from neutral at JPMorgan; Price Target: $37.00 from $35.00

Scans