Evening Wrap: ASX 200 slips as Healthcare rally fails to offset broader weakness

The S&P/ASX 200 closed 27.8 points lower, down 0.32%.

In a nutshell:

• Market turns negative: The S&P/ASX 200 fell 0.3% to 8,703 points after fading early gains of 0.26%, with ten of eleven sectors finishing in the red led by Industrials

• Healthcare outperforms: Healthcare stocks emerged as standout performers with the sector up 1.2% for the day and 8.5% for the month, bringing the index back to February levels

• Weak breadth: Market sentiment was subdued with 135 S&P/ASX 200 constituents (68%) closing down or flat, despite the market continuing to linger around record levels

Let's dive in.

ASX 200 Session Chart

ASX 200 closed down 27.8 points (Source: Market Index)

Markets

• Bapcor crashes on earnings miss: Automotive parts group plunged 28% to $3.65 after flagging weaker-than-expected May and June trading, $50 million in write-downs, and three director resignations. The stock is now trading at pandemic lows

• Fortescue surges on strong quarterly results: Shares rallied 4.3% to five-month highs after crushing Q4 expectations with iron ore shipments of 55.2Mt vs 54.1Mt estimates and FY26 guidance was a clean sweep across production, cost and capex

• Macquarie falls on CFO departure: Shares dipped 5% after announcing long-serving CFO Alex Harvey will step down on December 31, ahead of its AGM facing potential protest votes. Q1 noted improved performance from banking and Mac Capital more than offset by lower contributions from MAM and commodities

• Healthcare sector strength continues: Flows continued to push into the undervalued sector, with CSL (+1.5%), Cochlear (+0.9%) and ResMed (+0.4%) broadly higher. It'll be interesting to see just how hard this sector can run, currently up 8.5% for the month.

• Gold miners retreat: Gold names finished broadly lower amid optimism over potential US-EU trade deal. Top decliners include Westgold (-4.8%), Capricorn Metals (-3.4%) and Bellevue Gold (-3.2%)

• Overall: Nothing much to see, the market continues to linger around record levels. Some selling pressure today and a continued rotation into healthcare. The Materials sector (-0.11%) held up relatively well, all three iron ore heavyweights (BHP, Rio Tinto and Fortescue) have now reported operationally solid quarterlies.

Economy

• Australian business activity accelerates: Private sector output rose to 27-month highs with Composite PMI jumping to 53.6 in July from 51.6 in June, driven by services sector growth and manufacturing returning to expansion

• RBA Governor signals measured approach: Michele Bullock reaffirmed the bank's gradual rate-cutting strategy, noting that while underlying inflation may not fall as quickly as expected, the approach has preserved employment gains while bringing inflation down

• Trade deal optimism builds: Reports suggest the US and EU are nearing a trade agreement with 15% tariffs, matching the recent US-Japan framework and potentially easing global trade tensions ahead of the August 1 deadline

• Chinese lithium surge triggers sector rally: Chinese lithium carbonate futures it limit up (+8% to 77,240 a tonne) after regulatory issues forced production halt at Zangge Mining's Qarhan project, with Pilbara Minerals up 3.5%

Interesting Movers

Trading higher

• +19.38% Bougainville Copper (BOC) – Copper sector move

• +16.22% Pexa Group (PXA) – Formal commitment from NatWest

• +13.98% Iperionx (IPX) – No news

• +9.93% SILEX Systems (SLX) – Uranium sector move

• +9.72% Clarity Pharmaceuticals (CU6) – No news

• +9.68% Meteoric Resources (MEI) – Rare earth sector move

Trading lower

• -28.18% Bapcor (BAP) – Preliminary FY25 results, Board changes

• -6.70% Boss Energy (BOE) – CEO departure

• -6.15% Droneshield (DRO) – Contract win, but move likely a pullback

• -4.80% Macquarie Group (MQG) – Q1 update, CFO steps down

Broker Notes

AIC Mines (A1M)

• Retained at Buy at Bell Potter; Price Target: $0.60 from $0.56

Aeris Resources (AIS)

• Retained at Outperform at Macquarie; Price Target: $0.28 from $0.27

Ampol (ALD)

• Retained at Positive at E&P; Price Target: $34.00

• Retained at Buy at Goldman Sachs; Price Target: $32.80 from $32.20

• Retained at Neutral at JPMorgan; Price Target: $31.80 from $32.70

• Retained at Overweight at Morgan Stanley; Price Target: $30.00

• Retained at Buy at Ord Minnett; Price Target: $35.00

AMP (AMP)

• Retained at Overweight at Morgan Stanley; Price Target: $1.90 from $1.62

Andean Silver (ASL)

• Upgraded to Buy from Speculative buy at Euroz Hartleys; Price Target: $3.14 from $2.24

Bapcor (BAP)

• Retained at Neutral at Citi; Price Target: $5.43

Boss Energy (BOE)

• Retained at Speculative buy at Canaccord Genuity; Price Target: $5.30

Challenger (CGF)

• Downgraded to Underweight from Hold at Morgan Stanley; Price Target: $6.60 from $6.45

Centaurus Metals (CTM)

• Retained at Speculative buy at Canaccord Genuity; Price Target: $0.80

Clarity Pharmaceuticals (CU6)

• Retained at Speculative buy at Bell Potter; Price Target: $5.00 from $4.90

• Retained at Buy at Bell Potter; Price Target: $5.00 from $4.90

Dexus (DXS)

• Retained at Underweight at Morgan Stanley; Price Target: $7.75

Endeavour Group (EDV)

• Retained at Neutral at Citi; Price Target: $4.59

Emerald Resources NL (EMR)

• Retained at Buy at Canaccord Genuity; Price Target: $5.70 from $5.10

EVT (EVT)

• Retained at Overweight at Morgan Stanley; Price Target: $19.00

Fortescue (FMG)

• Retained at Neutral at Citi; Price Target: $16.00

• Retained at Neutral at Macquarie; Price Target: $15.00

FleetPartners Group (FPR)

• Retained at Overweight at Morgan Stanley; Price Target: $3.90

• Retained at Buy at Ord Minnett; Price Target: $3.40 from $3.50

Generation Development Group (GDG)

• Retained at Overweight at Morgan Stanley; Price Target: $5.65

• Retained at Accumulate at Morgans; Price Target: $6.25 from $6.00

GenusPlus Group (GNP)

• Retained at Buy at Bell Potter; Price Target: $5.00 from $3.30

Insignia Financial (IFL)

• Retained at Equal weight at Morgan Stanley; Price Target: $4.80 from $4.21

Iluka Resources (ILU)

• Retained at Buy at Argonaut Securities; Price Target: $6.00 from $5.50

• Retained at Overweight at Barrenjoey; Price Target: $5.40 from $5.20

• Downgraded to Neutral from Buy at Citi; Price Target: $5.30 from $5.20

• Retained at Buy at Goldman Sachs; Price Target: $6.50 from $5.40

• Retained at Outperform at Macquarie; Price Target: $6.30 from $6.50

• Retained at Overweight at Morgan Stanley; Price Target: $5.35 from $5.55

• Retained at Neutral at UBS; Price Target: $5.45 from $5.30

Microba Life Sciences (MAP)

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

• Retained at Buy at Bell Potter; Price Target: $0.16 from $0.26

Magnetic Resources NL (MAU)

• Retained at Buy at Shaw and Partners; Price Target: $3.33 from $2.53

Meteoric Resources NL (MEI)

• Retained at Overweight at Barrenjoey; Price Target: $0.25 from $0.40

• Retained at Outperform at Macquarie; Price Target: $0.34 from $0.36

Macquarie Group (MQG)

• Retained at Neutral at UBS; Price Target: $225.00

Northern Star Resources (NST)

• Retained at Buy at Citi; Price Target: $21.00

Paladin Energy (PDN)

• Retained at Buy at Argonaut Securities; Price Target: $8.55 from $10.75

• Retained at Neutral at Barrenjoey; Price Target: $7.60 from $8.15

• Retained at Buy at Bell Potter; Price Target: $8.70 from $9.20

• Retained at Buy at Canaccord Genuity; Price Target: $12.60 from $12.80

• Retained at Buy at Citi; Price Target: $9.90 from $10.10

• Retained at Negative at E&P; Price Target: $5.20 from $5.00

• Upgraded to Neutral from Underweight at JPMorgan; Price Target: $6.80 from $6.00

• Retained at Outperform at Macquarie; Price Target: $8.25 from $8.45

• Upgraded to Overweight at Morgan Stanley; Price Target: $7.45

• Retained at Equal weight at Morgan Stanley; Price Target: $7.45 from $4.50

• Retained at Sector perform at RBC Capital Markets; Price Target: $7.00 from $7.25

• Retained at Buy at Shaw and Partners; Price Target: $10.10

• Retained at Buy at UBS; Price Target: $9.00 from $9.40

Perpetual (PPT)

• Retained at Buy at UBS; Price Target: $22.50 from $20.50

Peter Warren Automotive Holdings (PWR)

• Upgraded to Positive from Neutral at E&P; Price Target: $1.83 from $1.37

• Retained at Equal weight at Morgan Stanley; Price Target: $1.40 from $1.50

• Retained at Hold at Morgans; Price Target: $1.75 from $1.45

• Retained at Hold at Ord Minnett; Price Target: $1.70 from $1.40

Scentre Group (SCG)

• Retained at Overweight at Morgan Stanley; Price Target: $4.34

Santana Minerals (SMI)

• Retained at Buy at Shaw and Partners; Price Target: $1.36

Westpac Banking Corporation (WBC)

• Retained at Sell at Citi; Price Target: $28.50 from $27.65

Woodside Energy Group (WDS)

• Retained at Neutral at Citi; Price Target: $25.50 from $21.50

• Downgraded to Equal weight from Overweight at Morgan Stanley; Price Target: $26.00

• Retained at Hold at Ord Minnett; Price Target: $25.00 from $27.00

Westgold Resources (WGX)

• Retained at Buy at Canaccord Genuity; Price Target: $5.35 from $5.30

• Retained at Buy at Goldman Sachs; Price Target: $3.30 from $3.20

• Retained at Outperform at Macquarie; Price Target: $3.60 from $3.50

Wisetech Global (WTC)

• Retained at Overweight at Morgan Stanley; Price Target: $140.00

Scans