Evening Wrap: ASX 200 slides on XRO results plunge, ANZ dividend, as lovely lithium stocks surge again

The S&P/ASX 200 closed 46.1 points lower, down 0.52%.

Resources stocks up (led by a smashing performance in the lithium sector), and Information Technology down (led by a smashing of Xero (XRO) after its full year results) – it's become and all too familiar theme lately. ANZ Group (ANZ) also didn't help proceedings, tumbling 5% – but it's not as bad as it seems – it did go ex-dividend 87 cents fully franked today (which still puts it down around 2.7%).

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 S&P/ASX 200 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 46.1 points lower at 8,753.4, 0.53%/0.59% from its session high/low – roughly at the mid-point of the session's range. Despite the half-half performance by the benchmark, in the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by a definitive 99 to 182.

Fund flows: Isn't it nice when things just work...

Remember that Honda ad from the 2000's? "Isn't it nice when things just work..."

Honda Accord Euro ("Cog") - TV Ad - Australia 2005

That's kinda how I feel after the last couple of day's trade. It ain't pretty, but at least it's not a big surprise. I don't like to use the "p" word – because given the future is unknown and anything can happen – prediction is futile. This means that anyone who ever said they "predicted" something, only did so by fluke. In my experience, this is most true when it comes to the stock market! 😉

But can I say, I have stated the bleeding obvious here for a few weeks now. Some sectors tend to be showing relative strength against the benchmark ASX 200, while others appear to be showing relative weakness. I've grouped some of the better performing sectors under the "Low P/E - cyclicals" – think of Resources (XJR) (+0.7%), with Gold Sub-Index (XGD) (+2.3%) often chipping in.

At the other end of the spectrum is "High P/E and risk-on" – think of Information Technology (XIJ) (-3.9%), Communication Services (XTJ) (-2.3%) and Consumer Discretionary (XDJ) (-0.7%).

There a few misses today, with Low P/E - cyclicals Energy (XEJ) (-2.7%) reverting to its mean on sharply lower energy commodity prices overnight, and other sectors like Utilities (XUJ) (-1.2%) and Real Estate (XPJ) (-3.2%) – i.e., the "Bond proxies" – suffering on a sharp spike in local benchmark bond yields. Those yields were up on better than expected employment data – see Economy below.

Australia 2-year Government Bond Yield chart

We've also observed this phenomena in the recent past: Rising bond yields make bond proxy sectors riskier propositions. Why buy risky bond-like stocks when you can buy risk-free government bonds that are delivering around about the same yield? 🤷

The chart above also likely explains the weakness in Financials (XFJ) (-0.8%) – but ANZ Group (ANZ) (-4.9%) on going ex-div 87 cents fully franked definitely contributed to that end result. I note Commonwealth Bank of Australia (CBA) (+1.1%) stopped its 2-day rout.

There was a silver lining to today's ASX 200 trading session, though, and I'll delve deeper into this in ChartWatch below! 🎅

Stock Specific: From hero to... 🤦

One the major reasons the XIJ suffered so acutely today was due to Xero (XRO) (-9.0%). No prediction, just observation – but as it turns out, today's surprise full year results disappointment was only so if you weren't paying attention to the chart.

This is because from the 25-Aug candle (red arrow in chart below), XRO began to meet my criteria for a Turnaround Setup. 11 times Feature Downtrend (i.e. highest conviction) since then. Again, isn't it nice when things just work!? (Coincidentally, I discuss the criteria for a Turnaround Setup in today's ChartWatch Markets).

Today's best blue chip gainers

Today's worst blue chip losers

ChartWatch

S&P/ASX 200 (XJO)

Analysis

In this morning’s ChartWatch ASX Scans I wrote:

Too many downtrends... Too many quality downtrends... 📉

Too many quality downtrends in stocks big enough to have an impact on the index... ⚠️

As some bloke called Shakespeare once wrote: "Something is wrong in the state of Denmark".

Can I propose that we're entering a dangerous phase for the Aussie share market over the next few days and possibly weeks – one that could determine whether Santa will be attending with his customary rally this year. Ho -ho -ho -hope so! 🎅

Well, ho -ho -hope springs eternal! That late last-hour rally on the Old Tin Pot saved its bacon… narrowly avoiding what looked for the vast majority of the day as a “big black candle close below the critical 8731 point of demand”.

But, are you convinced that worse isn’t to come? 🤔

Nope, me neither.

As much as I ho -ho -hope we see a Santa Claus rally this year – because a healthy bull is better than an angry bear (sure, one can go short in bear markets – but they tend to be far more volatile, and therefore dangerous for trend traders!).

Let’s put our ho -ho -hope aside for a second and face the cold hard technical analysis facts as we see them 🧐:

(Consistent with demand-side control = ✅ vs Consistent with supply-side control = ⚠️)

1. Short and long term trend ribbons: ⬇️/⬆️, short term is expanding (getting stronger) vs long term is contracting (getting weaker), the price is below both the short term trend ribbon and it is acting as a zone of dynamic excess supply, the long term uptrend ribbon continues to act as a zone of dynamic excess demand = ⚠️/⚖️.

2. Price action: Falling peaks and falling troughs (i.e., demand removal and supply reinforcement) = ⚠️.

3. Candles: Supply-side control (i.e., black-bodied candles and or upward pointing shadows) = ⚠️.

⚠️/⚖️ + ⚠️ + ⚠️ = Supply-side control by my reckoning...

View

The OTP dodged a bullet today. A close below 8731 and I would have moved to 1/3RP. A stay of execution perhaps... but I remain comfortable at 1/2RP (1/2 Risk Position = My personal allowable capital allocation limit for my investments in Australian stocks is 50%).

Key levels

• Today's low of 8701 is now the most critical short term point of demand. It's where the demand-side chose to make a stand today, so let's give them the benefit of the doubt for now. On a close below 8701 we are also beginning to challenge the dynamic demand of the long term uptrend ribbon for the first time in this entire bull phase – and it will be hard to argue anything but clear supply-side control.

• The long term uptrend ribbon (presently 8544-8697) now comes into focus as the next key zone of demand for the XJO.

• A close above the short term uptrend ribbon (presently 8871-8884) would help confirm the demand-side remains active in the system.

Economy

Today

• AUS October Employment

  • Change: +42,200 vs +20,300 forecast and +14,900 in September

  • Unemployment Rate: 4.3% vs 4.4% and 4.5% in September

  • Detail: Full time employment +55,000 vs part-time employment -13,000, participation rate steady at 67%

  • Commentary: "With today’s stronger than expected data, is the labour market getting more than “a little bit tight”, like the RBA previously described? We have been of the view that the labour market has been hovering around “balanced” rather than tight, because market wages growth is still slowing, employment gains have been decelerating, and the gap between labour supply and labour demand is still widening, as seen in the chart below." — My Bui, AMP

Later this week

Friday

• Tentative due to govt shutdown – USA October Core Consumer Price Index (CPI) (+0.3% m/m forecast vs +0.2% m/m in September)

• 05:01 USA 30-year Government Treasury Bond Auction

• 13:00 CHN October Data Dump

  • Fixed Asset Investment: -0.8% ytd/y forecast vs -0.5% ytd/y in September

  • Industrial Production: +5.5% p.a. vs +6.5% p.a. in September

  • Retail Sales: +2.8% p.a. vs +3.0% p.a. in September

  • Unemployment Rate: Forecast 5.2% vs 5.2% in October

Saturday

• Tentative due to govt shutdown – USA October Core Producer Price Index (PPI)

• Tentative due to govt shutdown – USA October Retail Sales

Latest News

Interesting Movers

Trading higher

• +26.7% Core Lithium (CXO) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +17.3% Boab Metals (BML) – No news, general strength across the broader Silver sector today.

• +15.3% IGO (IGO) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up 🔎📈

• +15.2% Galan Lithium (GLN) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up 🔎📈

• +14.6% Nova Minerals (NVA) – No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +13.3% Lake Resources (LKE) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up, added to ChartWatch ASX Scans Uptrends list today 🔎📈

• +12.8% Tivan (TVN) – No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +12.8% Wildcat Resources (WC8) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up 🔎📈

• +12.7% Horizon Minerals (HRZ) – No news, general strength across the broader Precious Metals sector today.

• +11.7% Domino’s Pizza Enterprises (DMP) – AGM Address and Presentation 2025, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up 🔎📈

• +11.6% Unico Silver (USL) – Change of Director's Interest Notice (P. Canterbury on-market trade), general strength across the broader Silver sector today.

• +10.7% Elevra Lithium (ELV) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +10.3% Liontown Resources (LTR) – Continued positive response to 12-Nov Liontown partners with Metalshub to launch its first auction, general strength across the broader Lithium sector today, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +10.2% Pilbara Minerals (PLS) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +9.1% Polymetals Resources (POL) – No news, general strength across the broader Silver sector today.

• +8.8% Silver Mines (SVL) – No news, general strength across the broader Silver sector today.

• +8.8% Ioneer (INR) – No news, general strength across the broader Lithium sector today.

• +8.6% Meteoric Resources (MEI) – No news, general strength across the broader Critical Minerals sector today.

• +8.5% Minerals 260 (MI6) – No news, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +8.0% Focus Minerals (FML) – No news, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +8.0% Shape Australia Corp. (SHA) – Continued positive response to 12-Nov Acquisition of the Arden Group business presentation, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +7.9% Sun Silver (SS1) – No news, general strength across the broader Silver sector today.

• +7.4% Flight Centre Travel Group (FLT) – Continued positive response to 12-Nov Chair & MD's AGM Speeches (inc trading update & guidance)e).

• +7.0% Macmahon Holdings (MAH) – Continued positive response to 12-Nov East Coast Investor Roadshow Presentation, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

Trading lower

• -31.4% Droneshield (DRO) — 13 November Share Price Movement and Response to ASX Price Query Letter, general weakness across the broader Defence sector today, fall is consistent with prevailing short term downtrend and falling peaks and falling troughs 🔎📉

• -17.2% Webjet Group (WJL) — Webjet Group releases preliminary 1H26 trading results.

• -10.8% Graincorp Class A (GNC) — FY25 Investor Presentation.

• -10.3% Waratah Minerals (WTM) — Drilling Extends Gold Mineralisation at Spur and Consols and Response to ASX Price Query.

• -9.0% Xero (XRO) — FY26 Interim Results Investor Presentation.

• -7.6% Resolution Minerals (RML) — Response to ASX aware letter.

• -7.3% Elsight (ELS) — No news, general weakness across the broader Defence sector today.

• -7.1% Infratil (IFT) — Infratil Interim Results for the period ended 30 September.

Broker Moves

Aristocrat Leisure (ALL)

• Retained at buy at Bell Potter; Price Target: $80.00 from $79.00

• Retained at outperform at Macquarie; Price Target: $75.00

Challenger (CGF)

• Upgraded to equal-weight from underweight at Morgan Stanley; Price Target: $8.50 from $7.00

Domino's Pizza Enterprises (DMP)

• Upgraded to neutral from sell at Citi; Price Target: $19.85 from $13.25

EVT (EVT)

• Retained at buy at Citi; Price Target: $17.30

Flight Centre Travel Group (FLT)

• Retained at buy at Jarden; Price Target: $18.00 from $17.20

• Retained at outperform at Macquarie; Price Target: $16.85 from $16.55

Generation Development Group (GDG)

• Retained at buy at Bell Potter; Price Target: $8.40

Graincorp (GNC)

• Retained at outperform at RBC Capital Markets; Price Target: $10.50

Helloworld Travel (HLO)

• Retained at buy at Shaw and Partners; Price Target: $2.75

Inghams Group (ING)

• Upgraded to buy from hold at Bell Potter; Price Target: $2.75

• Retained at neutral at Macquarie; Price Target: $2.30 from $2.70

Liontown Resources (LTR)

• Retained at buy at Bell Potter; Price Target: $1.52 from $1.30

Mineral Resources (MIN)

• Retained at buy at Bell Potter; Price Target: $59.00 from $57.00

• Retained at sell at Jarden; Price Target: $17.30 from $15.60

• Retained at underperform at Jefferies; Price Target: $33.50 from $27.50

• Retained at underperform at Macquarie; Price Target: $47.00 from $38.00

• Upgraded to hold from trim at Morgans; Price Target: $47.40 from $40.70

• Retained at neutral at UBS; Price Target: $52.60 from $49.65

Orezone Gold Corporation (ORE)

• Retained at buy at Canaccord Genuity; Price Target: $3.25

Orica (ORI)

• Retained at outperform at RBC Capital Markets; Price Target: $24.70

Pilbara Minerals (PLS)

• Retained at sell at Bell Potter; Price Target: $2.65

PMET Resources Inc (PMT)

• Retained at buy at Bell Potter; Price Target: $0.65 from $0.40

Pinnacle Investment Management Group (PNI)

• Retained at outperform at Macquarie; Price Target: $26.55

Regis Resources (RRL)

• Retained at outperform at RBC Capital Markets; Price Target: $6.50

Steadfast Group (SDF)

• Initiated at buy at Citi; Price Target: $6.50

Sandfire Resources (SFR)

• Retained at outperform at RBC Capital Markets; Price Target: $16.25

SHAPE Australia Corporation (SHA)

• Retained at buy at Shaw and Partners; Price Target: $7.40 from $6.10

Webjet Group (WJL)

• Retained at outperform at RBC Capital Markets; Price Target: $1.30

Xero (XRO)

• Retained at sector perform at RBC Capital Markets; Price Target: $185.00

Scans