Market Wraps

Evening Wrap: ASX 200 rises, Chinese iron ore futures rally, coal miners surge

Mon 05 Sep 22, 4:44pm (AEST)

The S&P/ASX 200 closed 24 points higher, up 0.34%.

The local sharemarket bounces but remains in no man's land. We take a look at the September quarterly rebalance, Chinese iron ore futures and the RBA rate hike on Tuesday.

Let's dive in.


Market close summary ASX
ASX 200, All Ords and All Tech intraday overview

Markets

  • 4 out of 11 sectors advanced

  • Energy and Material sectors led as commodity prices bounced back

  • Staples and Utilities were also relative outperformers

  • All other sectors fell between 0.5% and 1.0%

  • 51% of the top 200 companies declined

Stocks

S&P/ASX Indices September quarterly rebalance, effective prior to the open of trading on Monday, September 19, 2022.

ASX 200 additions:

Company

Ticker

Industry

1-yr return (%)

Capricorn Metals

CMM

Gold exploration

47

Charter Hall Social Infrastructure

CQE

Real Estate

-7.6

John Lyng Group

JLG

Building insurance and construction

17

Karoon Energy

KAR

Energy

71.6

Lovisa Holdings

LOV

Retail

18.1

Smartgroup Corporation

SIQ

Commercial services

-24.7

Spark New Zealand

SPK

Telecommunication Services

3.9

Sayona Mining

SYA

Lithium exploration

61.6

ASX 200 removals:

Company

Ticker

Industry

1-yr return (%)

Life360

360

Technology

-48.9

City Chic Collective

CCX

Retail

-75

Clinuvel Pharmaceuticals

CUV

Biotech

-51.7

EML Payments

EML

Fintech

-78.4

Janus Henderson

JHG

Funds management

-42.6

Pointsbet

PBH

Sports betting

-79.5

Zip Co

ZIP

BNPL

-87.7

AVZ Minerals

AVZ

Lithium exploration

Shares suspended since May

Economy

  • Australian retail sales rose 1.3% in July from 0.2% in June

    • No revisions compared to 29 August release

    • "After slowing growth in recent months, the 1.3 per cent rise in July was the largest since the 1.6 per cent rise in March 2022,' said Ben Drober, head of retail statistics at the ABS

  • Australian company gross operating profits rose 7.6% in the June quarter, from 9.8% in the March quarter

  • Australian wages and salaries rose 3.3% in the June quarter

  • China Caixin Services PMI eased to 55.0 in August from 55.5 in July

    • Consensus expected a decline to 51

    • "The service sector's recovery from a widespread outbreak of Covid-19 earlier in the year continued in spite of new flare-ups," said Wang Zhe, senior economist at Caixin

Commodities 

  • Iron ore futures on China’s Dalian Commodity Exchange rose 4.4%

    • Blast furnace capacity utilisation among Chinese steel mills increased for a 5th straight week, up 1.6 percentage points to 86.8%, according to Mysteel

  • Brent crude oil bounces 1.8% to US$94.9 a barrel

  • Uranium futures fell -3.5% to US$50.6

  • Newcastle coal futures rose 1.8% to US$435 a tonne


Scans

Top Gainers

Code Company Last % Chg
FMS Flinders Mines Ltd $0.75 +41.51%
AJL AJ Lucas Group Ltd $0.133 +35.20%
FRS Forrestania Resou... $0.195 +30.00%
CXU Cauldron Energy Ltd $0.013 +25.00%
CMD Cassius Mining Ltd $0.038 +22.58%
View all top gainers

Top Fallers

Code Company Last % Chg
IVZ Invictus Energy Ltd $0.203 -20.59%
KRR King River Resour... $0.014 -15.63%
ATP Atlas Pearls Ltd $0.033 -15.39%
GIB Gibb River Diamon... $0.05 -15.25%
AUQ Alara Resources Ltd $0.052 -14.75%
View all top fallers

52 Week Highs

Code Company Last % Chg
AJL AJ Lucas Group Ltd $0.133 +35.20%
CMD Cassius Mining Ltd $0.038 +22.58%
LCT Living Cell Techn... $0.013 +18.18%
SPD Southern Palladiu... $1.10 +15.79%
BBL Brisbane Broncos Ltd $1.29 +14.67%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
KRR King River Resour... $0.014 -15.63%
SMN Structural Monito... $0.35 -12.50%
EMS Eastern Metals Ltd $0.11 -12.00%
RVS Revasum Inc $0.155 -11.43%
BTR Brightstar Resour... $0.016 -11.11%
View all 52 week lows

Near Highs

Code Company Last % Chg
NEA Nearmap Ltd $2.08 -0.48%
RAP Resapp Health Ltd $0.20 0.00%
BILL Ishares Core Cash... $100.43 +0.03%
IIND Betashares India ... $10.41 +0.58%
SNL Supply Network Ltd $10.65 -0.37%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
VBND Vanguard Global A... $42.32 +0.33%
PPK PPK Group Ltd $1.55 +2.99%
ABB Aussie Broadband Ltd $2.56 +1.99%
DDR Dicker Data Ltd $10.35 -0.96%
GRR Grange Resources Ltd $0.755 +2.03%
View all RSI oversold

Latest news


Post market charts

The market feels like its in a coin flip state. It needs to show some strength around these key levels otherwise the likelihood of revisiting June lows will continue to grow.

S&P/ASX 200: Solid day given the weak lead from Wall Street. A nice little bounce but so what? The ASX 200 is still clinging onto dear life.

XJO chart
ASX 200 daily chart (Source: TradingView, Annotations by Market Index)

S&P/ASX 200 Energy: Bouncing off the 20-day moving average.

XEJ chart
ASX 200 Energy index (Source: TradingView)

Stocks and sectors

Lithium gets a bid: Lithium names powered ahead on Monday, led by large cap names like Allkem (ASX: AKE), Pilbara Minerals (ASX: PLS) and Core Lithium (ASX: CXO). It's good to see the sub-sector that led the July/August rally hold up pretty well. Other names like Liontown Resources (ASX: LTR), Essential Metals (ASX: ESS) and Lithium Power (ASX: LPI) starting to consolidate around key areas like the 20-day.

LPI chart
Lithium Power chart (Source: TradingView, Annotations by Market Index)

Uranium not falling apart: Uranium has been notorious for rallying off news and then going back to square one. Most uranium names rose 3-6% on Monday. A few like Paladin Energy (ASX: PDN) are close to recent highs.

PDN chart
Paladin Energy chart (Source: TradingView)

A few names pushing: Myer (ASX: MYR), Arafura (ASX: ARU), Neuren Pharma (ASX: NEU) all moved out of recent trading ranges

MYR chart
Myer chart (Source: TradingView, Annotations by Market Index)

Food for thought

RBA interest rate decision: The RBA is expected to hike rates by another 50-basis points on Tuesday at 2:30 pm AEST. In terms of intraday performance for the ASX 200 on rate decision days (rate hike vs. expectations):

  • 3 May -0.42% (larger-than-expected)

  • 7 June -1.53% (larger-than-expected)

  • 5 Jul +0.25% (in-line)

  • 2 Aug +0.07% (in-line)

European central bank also poised to hike: The ECB is expected to lay down a 50 or 75 basis point hike on Thursday night. ING noted a broader paradigm shift among global central banks post Jackson Hole symposium, "characterised by central banks trying to break inflation, accepting the potential costs of pushing economies further into recession."

Rate history lesson with ING: "This is similar to what we had in the early 1980s. Back then, higher inflation was also mainly a supply-side phenomenon but eventually led to price-wage spirals and central banks had to hike policy rates to double-digit levels in order to bring inflation down. With the current paradigm shift, central banks are trying to get ahead of the curve – at least ahead of the curve of the 1970s and 1980s," said ING's Carsten Brzeski

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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