Evening Wrap: ASX 200 rises as crude price plunge boosts miners, coal stocks jump after China mine explosion

The S&P/ASX 200 closed 35.0 points higher, up 0.40%.

The ASX 200 edged higher as the benchmark Brent crude futures plunged nearly 8% after US officials signalled an Iran deal and Strait of Hormuz reopening may be imminent. Oil and gas stocks bore the full brunt of the oil selloff, while coal names surged on news of a potential supply shock out of China.

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 35.0 points higher at 8,692, 0.55% from its session low and 0.24% from its high. In the broader-based S&P/ASX 300 (XKO) advancers beat decliners by 177 to 108.

The Gold Sub-Index (XGD) (+4.9%) was the session's standout. Falling oil prices eased global inflation expectations and softened benchmark risk-free bond yields, lowering the opportunity cost of holding non-yielding precious metals. COMEX gold futures gained 0.8% to US$4,560/oz and COMEX silver futures rose 2.4% to US$78.00/oz. Resolute Mining (RSG) (+9.4%), Genesis Minerals (GMD) (+8.5%), Ramelius Resources (RMS) (+6.6%), Northern Star Resources (NST) (+5.7%), and Newmont (NEM) (+5.1%) all gained.

Materials (XMJ) (+1.8%) was carried by the gold sector's momentum alongside broad buying in base metals and diversified mining names. COMEX copper futures added 0.6% to US$6.42/lb and SGX iron ore futures edged up 0.4% to US$106.65/t.

Alcoa (AAI) (+6.2%) was the standout after a UBS upgrade to Buy with a price target lift to $110 from $105. James Hardie Industries (JHX) (+3.3%), Sandfire Resources (SFR) (+2.1%), Fortescue (FMG) (+1.7%) — which announced former CEO Elizabeth Gaines would exit its board on June 30 — Rio Tinto (RIO) (+1.6%), and BHP (BHP) (+0.6%) all advanced.

Coal stocks surged on a separate commodity supply shock. A fatal explosion at the privately owned Liushenyu mine in China's Shanxi province over the weekend left at least 82 dead — the country's deadliest coal accident since 2009 — with the Chinese Communist Party vowing a rigorous investigation and severe penalties. Speculation is growing that tightened safety scrutiny could reduce Chinese coal output near term, sending ASX coal names sharply higher. Whitehaven Coal (WHC) (+8.7%), Yancoal Australia (YAL) (+7.5%), and New Hope Corp. (NHC) (+4.7%) all surged.

The same news likely helped uranium stocks — Paladin Energy (PDN) (+3.7%), Deep Yellow (DYL) (+3.4%), Boss Energy (BOE) (+3.2%), and NexGen Energy (NXG) (+2.3%) all gained.

Lithium stocks recovered alongside a 1.9% rebound in Australian spodumene concentrate to US$2,665/t. Develop Global (DVP) (+4.5%), Vulcan Energy Resources (VUL) (+2.9%), Mineral Resources (MIN) (+2.7%), and Pilbara Minerals (PLS) (+1.4%) all advanced.

Consumer Discretionary (XDJ) (+1.0%) benefited from falling oil easing cost-of-living pressure and softening benchmark yields boosting confidence in spending-sensitive stocks. Wesfarmers (WES) (+1.5%), Nick Scali (NCK) (+1.5%), Lovisa (LOV) (+1.4%), and JB Hi-Fi (JBH) (+1.3%) were the notable movers. Qantas Airways (QAN) also rallied sharply as lower fuel costs improved the airline's near-term cost outlook.

Information Technology (XIJ) (+1.0%) found renewed interest as lower yields improved the relative appeal of long-duration growth stocks. Siteminder (SDR) (+4.7%), Life360 (360) (+3.6%), and Technology One (TNE) (+1.8%) all advanced.

Energy (XEJ) (-2.4%) was the session's worst performer as ICE Brent crude futures plunged 7.8% to US$95.46/bbl on optimism that a US-Iran deal to reopen the Strait of Hormuz may be imminent. Oil and gas producers bore the sharpest losses — Viva Energy (VEA) (-5.6%), Woodside Energy (WDS) (-4.2%), Santos (STO) (-3.6%), and Karoon Energy (KAR) (-5.7%) all fell.

Communication Services (XTJ) (-1.3%) was softer as investors rotated away from defensive positioning on improved risk sentiment. Seek (SEK) (-5.0%), CAR Group (CAR) (-2.6%), and Telstra (TLS) (-0.9%) were all lower.

Health Care (XHJ) (-0.7%) continued its persistent underperformance. CSL (CSL) (-1.3%), ResMed (RMD) (-1.2%), and Pro Medicus (PME) (-0.7%) were all lower.

Financials (XFJ) (-0.1%) were marginally negative, with the major banks mixed. Commonwealth Bank (CBA) (-0.6%) and QBE Insurance (QBE) (-2.1%) weighed, with Citi warning the budget's effects on CBA have not yet been fully reflected in prices. National Australia Bank (NAB) (+1.1%) and Westpac (WBC) (+0.6%) were exceptions, with NAB lifted by a Citi rating upgrade.

In other commodities moves, NdPr rare earth prices in China fell 1.7% to CNY 686,500/t in the Asian session.

Today's best ASX Top 300 gainers

Today's worst ASX Top 300 losers

ChartWatch

Nasdaq Composite Index

Analysis

What a tough gig value investing is... Poring over the data... Earnings, margins, the economy, interest rates, currencies, company management, the list goes on...

I really do feel for my fundamental analyst friends who honestly believe they can synthesis all of this complex, ever-changing information and come arrive at a to-the-cent valuation for a stock... Or a to-the-point valuation for a stock index like the Comp.

Kudos to them and their big brains. 🧠🏆

The only problem is, for many, and for much of the time... Stocks often appear "OVERVALUED" only to continue to be driven higher by improving fundamentals (i.e., those that weren't originally baked into valuation models), or even more dastardly — by improving sentiment.

The NASDAQ Composite Index is OVERVALUED!!!

It's that last item, the notion that prices can rise without a commensurate increase in earnings that blows the most minds in fundamental analysis land (i.e., the 'P' in the 'P/E' ratio can go up even if the 'E' hasn't changed 🤯). The market is a fickle beast, and in my experience: it reserves the right to do whatever it wants whenever it wants.

And despite that, the market is never wrong. Even when the experts say it is.

Because it's the market that determines the true price of an asset — not any one 'expert' that came to their own unique conclusion looking at the unique set of limited data points (always 'limited', for only the maker knows 'all'!).

Each day I read another, and another 'expert' tell us how OVERVALUED stocks are right now. Hey, they may be their version of right some day (it depends on the price they sold everything/refused to buy, I guess!).

In my long experience observing markets, I've grown to realise that bearish observations about OVERVALUATION are a dime a dozen in a bull market. Far fewer, are those from those quietly and diligently following the trend. But I guess as a trend follower you don't really have an opinion about 'cheap' or 'expensive', do you? You're just going with the flow.

So, you have nothing to say about under or OVERVALUATION. Nope, you just shut up, follow the trend, and manage your risk.

Then there's this... LOL! 🤣

(Technical analysis of the Comp: On Friday, there was a bit more demand from those who don't think the Comp is OVERVALUED compared to the supply from those who do think it's OVERVALUED. Volume was above average — so the limited price action suggests churn. Both parties are ready to engage here, but neither is doing so with any great motivation. The prevailing short- and long-term trends, price action, and predominance of demand side candles remains intact = demand side controlled market = no change to my portfolio risk. Now, I'm not a sitting duck. I won't hold on to my US stocks should the trend turn... all the way down like a dear in the headlights. Nope, if I see signs the supply side is gaining control of the Comp's price, I will reduce my exposure and increase my cash levels. It's that simple. Whatever will be will be. The future is unknown — prediction is futile!!! 🚫🔮)

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% 🪣).

Key levels

26708 is the key point of supply. 25701-39 is the closest point of demand, then there's the short term uptrend ribbon (presently 25071-25632). 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

Oh OTP, you're so powerful... You're so amazing... Three up-days in a row... 🙌🙌🙌

Don't get too excited long suffering ChartWatch readers!

Comp futures are up 420-odd points... S&P futures around 72 points... All we did today was follow thier lead! Zero independent thought!

ChartWatch is not affiliated with MarketWatch in any way (although I may have 'leveraged' its name! 😉)

Rest assured, if the Yanks have a bad night tonight, it won't be all roses and chocolates down here tomorrow...

Anyways, call a spade a spade and everything: the OTP has logged three decent demand side candles in a row (i.e., white-bodied and or downward pointing shadows).

This means it's now interacting with the short and long term trend ribbons. I want to see a clean and decisive close above them (presently 8674-8740). Ideally, also a higher trough to 8485 — to confirm the demand side is growing in motivation and the supply side is growing less influential on price.

Until then, everything between 9022 and those last three demand side candles is pretty rubbish. And if we zoom further out again, it really hasn't been all that pretty since October last year... 😩

View

I remain 1/3RP 🪣 on the OTP (i.e., my personal allowable capital allocation limit for my investments in Australian stocks is 33%).

Key levels

The short- and long-term trend ribbons (presently 8674-8740) 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

• There weren't any major economic data releases in our time zone today

• USA & EUR Markets closed for public holidays

Later this week

Tuesday

• 22:00 USA May Conference Board Consumer Confidence (91.9 forecast vs 92.8 previous)

Wednesday

• 00:00 AUS April Consumer Price Index (CPI)

  • Headline: +0.6% m/m & +4.4% p.a. vs +1.1% m/m & +4.6% p.a. previous

  • Trimmed Mean: +0.3% m/m forecast vs +0.3% m/m previous

Thursday

• 09:30 AUS April Household Spending (-0.3% m/m forecast vs +1.6% m/m previous)

• 20:30 USA April Personal Consumption Expenditures (PCE)

  • PCE Index: +0.3% m/m forecast vs +0.3% m/m previous

  • Personal Income: +0.4% m/m forecast vs +0.6% m/m previous

  • Personal Spending: +0.5% m/m forecast vs +0.9% m/m previous

• 20:30 USA March Quarter Preliminary GDP (+2.1% p/.a forecast vs +0.7% p.a. previous)

• 20:30 USA April Core Durable Goods Orders (+0.5% m/m forecast vs +0.9% m/m previous)

• 22:00 USA April New Home Sales (661,000 forecast vs 682,000 previous)

Friday

• 09:30 AUS April Private Sector Credit (+0.6% m/m forecast vs +0.7% m/m previous)

Latest News

Interesting Movers

Trading higher

• +21.0% Coronado Global Resources (CRN) - reached a deal to sell its Logan mining complex in West Virginia for nominal cash consideration, transferring all reclamation and operational obligations; the sale will be free cash flow positive by eliminating care and maintenance costs, allowing the company to focus on its core metallurgical coal operations; the stock also benefited from the broader ASX coal sector surge following the fatal Liushenyu mine explosion in China.

• +8.7% Whitehaven Coal (WHC) - surged after a fatal explosion at the privately owned Liushenyu mine in China's Shanxi province left at least 82 dead, sparking market expectations that heightened safety scrutiny could reduce near-term Chinese coal output.

• +7.5% Yancoal Australia (YAL) - advanced for the same reason as Whitehaven, as markets priced in potential supply disruption from Chinese mine safety scrutiny following the Liushenyu disaster.

• +6.7% Charter Hall Group (CHC) - upgraded FY26 operating earnings guidance for a third time to $1.03 per share as institutional capital inflows surged to a record $6.5 billion and funds under management rose to $74.7 billion; JP Morgan subsequently upgraded its rating to Neutral from Underweight.

• +6.3% Adore Beauty (ABY) - reported 47-week revenue up 7.4% to $193.4 million and guided to full-year underlying EBITDA of $4 million with second-half gross margin of 34.5%.

• +6.2% Alcoa (AAI) - UBS upgraded to Buy from Neutral and lifted its price target to $110 from $105.

• +4.7% New Hope Corp. (NHC) - advanced alongside the broader coal sector surge following the fatal Liushenyu mine explosion in China.

• +1.1% National Australia Bank (NAB) - Citi upgraded the stock and named it alongside ANZ as its preferred bank exposure given the federal budget's negative gearing changes.

Trading lower

• -9.7% Arafura Rare Earths (ARU) - received commitments for a two-tranche $350 million institutional placement at $0.26 per share — a steep discount to the $0.37 price at which the stock was trading before rumours of the raising first emerged on May 13.

• -5.7% Karoon Energy (KAR) - fell alongside other oil and gas producers as the spot price of Brent crude plunged on Iran deal optimism; the company separately announced the commencement of an Asian investor roadshow.

• -1.3% Beach Energy (BPT) - announced plans to sell its 60% stake in the VIC/L35 permit in the Otway Basin for approximately $130 million in upfront cash and estimated royalties, and decided not to proceed with the La Bella 2 development well, freeing up more than $500 million in planned capital expenditure.

Broker Moves

Alcoa Corporation (AAI)

• Upgraded to buy from neutral at UBS; Price Target: $110.00 from $105.00

Aristocrat Leisure (ALL)

• Retained at buy at Citi; Price Target: $61.00

AMP (AMP)

• Retained at buy at UBS; Price Target: $1.65

ANZ Group Holdings (ANZ)

• Retained at buy at Citi; Price Target: $40.00

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

Aspen Group (APZ)

• Initiated at buy at Citi; Price Target: $5.40

ASX (ASX)

• Retained at buy at UBS; Price Target: $65.20

AUB Group (AUB)

• Retained at buy at UBS; Price Target: $34.00

Aurum Resource (AUE)

• Retained at speculative buy at Canaccord Genuity; Price Target: $1.55

Bannerman Energy (BMN)

• Retained at outperform at Macquarie; Price Target: $5.55

Boss Energy (BOE)

• Retained at overweight at Morgan Stanley; Price Target: $1.80

Catapult Sports (CAT)

• Retained at buy at Morgans; Price Target: $5.40 from $5.55

Commonwealth Bank of Australia (CBA)

• Retained at sell at Citi; Price Target: $140.00

• Retained at underweight at Morgan Stanley; Price Target: $130.00

Codan (CDA)

• Retained at buy at Canaccord Genuity; Price Target: $47.05

• Retained at buy at Goldman Sachs; Price Target: $45.10

• Retained at buy at Moelis Australia; Price Target: $48.74

Challenger (CGF)

• Retained at buy at UBS; Price Target: $10.10

Charter Hall Group (CHC)

• Retained at buy at Citi; Price Target: $23.00

• Upgraded to neutral from underweight at JPMorgan; Price Target: $21.00

• Retained at buy at UBS; Price Target: $24.50

Computershare (CPU)

• Retained at neutral at UBS; Price Target: $33.00

Clinuvel Pharmaceuticals (CUV)

• Retained at speculative buy at Bell Potter; Price Target: $17.00 from $19.00

Cygnus Metals (CY5)

• Retained at speculative buy at Canaccord Genuity; Price Target: $0.35

Deep Yellow (DYL)

• Retained at outperform at Macquarie; Price Target: $2.25

The Environmental Group (EGL)

• Retained at buy at Bell Potter; Price Target: $0.21 from $0.35

Energy One (EOL)

• Retained at buy at Ord Minnett; Price Target: $18.51 from $20.56

EQT Holdings (EQT)

• Downgraded to accumulate from buy at Ord Minnett; Price Target: $17.75 from $35.00

Gemlife Communities Group (GLF)

• Initiated at accumulate at Ord Minnett; Price Target: $5.30

GQG Partners Inc. (GQG)

• Retained at buy at UBS; Price Target: $2.00

Guzman Y Gomez (GYG)

• Upgraded to buy from hold at Bell Potter; Price Target: $24.50 from $22.10

• Retained at neutral at Jarden; Price Target: $17.60 from $17.30

• Retained at overweight at JPMorgan; Price Target: $23.00 from $22.50

• Retained at outperform at Macquarie; Price Target: $25.20

• Retained at overweight at Morgan Stanley; Price Target: $26.30

• Retained at buy at Morgans; Price Target: $29.40 from $26.70

• Retained at buy at Ord Minnett; Price Target: $31.00 from $32.00

• Retained at outperform at RBC Capital Markets; Price Target: $23.00 from $22.00

• Retained at buy at UBS; Price Target: $24.00 from $22.00

HUB24 (HUB)

• Retained at neutral at UBS; Price Target: $91.00

Insurance Australia Group (IAG)

• Retained at buy at UBS; Price Target: $8.80

IGO (IGO)

• Retained at buy at UBS; Price Target: $9.75

IPD Group (IPG)

• Retained at buy at Bell Potter; Price Target: $6.20 from $5.30

• Retained at buy at Shaw and Partners; Price Target: $5.85 from $5.35

Infotrust (ITS)

• Retained at buy at Bell Potter; Price Target: $0.58 from $0.62

L1 Group (L1G)

• Retained at neutral at UBS; Price Target: $1.18

Lifestyle Communities (LIC)

• Retained at neutral at Citi; Price Target: $5.40 from $5.10

Lotus Resources (LOT)

• Retained at outperform at Macquarie; Price Target: $1.30 from $1.90

Liontown (LTR)

• Retained at buy at UBS; Price Target: $2.70 from $2.90

Lynas Rare Earths (LYC)

• Retained at equal-weight at Morgan Stanley; Price Target: $20.45

Magellan Financial Group (MFG)

• Retained at neutral at UBS; Price Target: $10.10

Mineral Resources (MIN)

• Retained at buy at UBS; Price Target: $83.00 from $73.00

Megaport (MP1)

• Retained at buy at Citi; Price Target: $15.00

Medibank Private (MPL)

• Retained at neutral at UBS; Price Target: $4.85

MaxiPARTS (MXI)

• Retained at buy at Ord Minnett; Price Target: $2.80 from $2.85

National Australia Bank (NAB)

• Upgraded to neutral from sell at Citi; Price Target: $37.40

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

Navigator Global Investments (NGI)

• Retained at buy at UBS; Price Target: $3.80

NIB Holdings (NHF)

• Retained at neutral at UBS; Price Target: $7.05

Netwealth Group (NWL)

• Retained at neutral at UBS; Price Target: $27.00

PMET Resources Inc (PMT)

• Retained at buy at UBS; Price Target: $0.90 from $0.80

Pinnacle Investment Management Group (PNI)

• Retained at neutral at UBS; Price Target: $16.75

PEXA Group (PXA)

• Retained at neutral at UBS; Price Target: $15.70

QBE Insurance Group (QBE)

• Retained at buy at UBS; Price Target: $23.95

Steadfast Group (SDF)

• Retained at buy at UBS; Price Target: $6.00

SEEK (SEK)

• Retained at buy at Ord Minnett; Price Target: $22.00 from $23.00

Sandfire Resources (SFR)

• Retained at underweight at Morgan Stanley; Price Target: $16.00

SGH (SGH)

• Retained at buy at Bell Potter; Price Target: $50.00 from $56.00

Select Harvests (SHV)

• Initiated at underweight at Jarden; Price Target: $3.60

Serko (SKO)

• Retained at buy at Ord Minnett; Price Target: $3.25 from $4.98

Suncorp Group (SUN)

• Retained at buy at UBS; Price Target: $19.60

Tuas (TUA)

• Retained at overweight at Morgan Stanley; Price Target: $5.00 from $10.00

Tower (TWR)

• Retained at buy at Citi; Price Target: $1.75 from $1.85

Westpac Banking Corporation (WBC)

• Retained at neutral at Citi; Price Target: $39.00

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

Wesfarmers (WES)

• Upgraded to accumulate from trim at Morgans; Price Target: $81.10 from $80.50

Whitehaven Coal (WHC)

• Retained at overweight at Morgan Stanley; Price Target: $9.55

Scans