Evening Wrap: ASX 200 slumps as iron ore price plunge rocks BHP, RIO and FMG

The S&P/ASX 200 closed 99.6 points lower, down 1.13%.

The ASX 200 slumped as iron ore stocks were hammered by surging Simandou production data pointing to sustained supply pressure, while broad base metals weakness, gold's retreat, and renewed Middle East tension compounded selling across materials and technology. Defensive sectors — utilities, healthcare, and consumer staples — were the refuge.

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 99.6 points lower at 8,686.1, 1.2% from its session high and 0.4% from its low. In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by 112 to 160.

Utilities (XUJ) (+1.3%) was the session's best sector as investors sought shelter in stable, income-generating assets amid the broad market selldown. APA Group (APA) (+2.0%), AGL Energy (AGL) (+1.1%), and Origin Energy (ORG) (+0.9%) all advanced.

Consumer Staples (XSJ) (+1.0%) was lifted by two distinct stock-specific events alongside the usual defensive rotation thematic (well... resources and banks are down... so something else must get that cash!). Treasury Wine Estates (TWE) (+13.1%) surged after its investor day outlined a major strategic pivot — narrowing to 10 key brands, investing in lighter styles and low/no-alcohol wines, and flagging a strategic review of its US operations that could result in asset sales.

Endeavour Group (EDV) (+3.8%) also gained after a Citi upgrade and investor day update. The broader defensive cohort — Metcash (MTS) (+3.1%) and Woolworths (WOW) (+0.5%) — also firmed.

Health Care (XHJ) (+0.8%) had a rare winning session as the rotation into defensives brought buyers back to a sector that has been the ASX's worst performer over the past 12 months. Telix Pharmaceuticals (TLX) (+5.7%), 4DMedical (4DX) (+3.4%), ResMed (RMD) (+2.6%), and CSL (CSL) (+0.4%) all gained.

Energy (XEJ) (+0.4%) edged higher as coal stocks gained on stronger commodity pricing, and downstream fuel names caught a bid despite ICE Brent crude futures falling 0.9% to US$96.94/bbl in Asian trade. Whitehaven Coal (WHC) (+3.0%), Yancoal Australia (YAL) (+2.7%), and New Hope Corp. (NHC) (+2.2%) all advanced. Ampol (ALD) (+4.1%) and Viva Energy (VEA) (+2.2%) were also stronger.

Materials (XMJ) (-3.2%) was the session's hardest-hit sector, driven by converging negative commodity price shocks. Iron ore exports from Simandou — the massive Guinea mine partly owned by Rio Tinto — surged to 2.2 million tonnes in May, well above April's record 1.3 million tonnes and compared with 0.6 million tonnes or less in each of the first three months of the year. This drove SGX iron ore futures down 1.9% to US$101.65/t — their lowest level in two months. Fortescue (FMG) (-4.1%), BHP (BHP) (-3.3%), Rio Tinto (RIO) (-3.3%), and Mineral Resources (MIN) (-2.3%) all retreated (for BHP and RIO, from recent record highs).

Base metals names were also hammered as LME nickel fell 1.9% and aluminium 1.5% overnight, with COMEX copper futures extending a 0.3% loss by a further 0.9% in Asian trade. Nickel Industries (NIC) (-4.6%), Capstone Copper (CSC) (-4.3%), Sandfire Resources (SFR) (-3.7%), and South32 (S32) (-3.3%) were all sharply lower.

The Gold Sub-Index (XGD) (-3.1%) was caught in a pincer — the overnight oil price spike renewed inflation fears, lifted benchmark bond yields, and raised the opportunity cost of holding non-yielding gold. This forced COMEX gold futures 1.7% lower overnight before recovering 0.6% to US$4,496/oz in Asian trade. COMEX silver futures fell 2.5% overnight before easing a further 0.4% to US$73.40/oz. Pantoro Gold (PNR) (-8.2%), Northern Star Resources (NST) (-6.1%), and Genesis Minerals (GMD) (-4.9%) were the sharpest fallers.

Information Technology (XIJ) (-1.9%) and Communication Services (XTJ) (-2.2%) both extended recent profit-taking as the risk-off session and a pullback in the Nasdaq on Wednesday gave investors a reason to crystallise gains from recent strong performances. Xero (XRO) (-4.2%), Life360 (360) (-4.0%), and WiseTech Global (WTC) (-2.9%) were the XIJ laggards. Telstra (TLS) (-2.9%), CAR Group (CAR) (-1.8%), and Seek (SEK) (-1.2%) weighed on Communication Services.

Financials (XFJ) (-0.7%) was another sector that couldn't capitalise on yesterday's strength. Westpac (WBC) (-1.7%) was the most notable faller, with Macquarie Group (MQG) (-1.1%), Commonwealth Bank (CBA) (-0.6%), National Australia Bank (NAB) (-0.6%), and ANZ (ANZ) (-0.5%) all lower.

Lithium stocks were harshly treated as GFEX lithium carbonate futures fell 4.6% to CNY 160,750/t — their sharpest single-session decline in weeks. Vulcan Energy Resources (VUL) (-8.6%), Elevra Lithium (ELV) (-7.8%), Liontown Resources (LTR) (-5.8%), Pilbara Minerals (PLS) (-4.5%), and IGO (IGO) (-3.2%) all fell sharply.

Uranium stocks reversed most of yesterday's Urenco-inspired gains, tracking a 5% overnight fall in Cameco on the NYSE — Paladin Energy (PDN) (-8.2%), NexGen Energy (NXG) (-6.9%), Deep Yellow (DYL) (-5.2%), and Boss Energy (BOE) (-3.7%) all retreated.

Critical minerals and rare earths stocks were also caught in the materials sector downdraft — Metals X (MLX) (-4.6%), Alpha HPA (A4N) (-4.5%), Lynas Rare Earths (LYC) (-4.0%), and Arafura Rare Earths (ARU) (-3.6%) were all lower.

Today's best ASX Top 300 gainers

Today's worst ASX Top 300 losers

ChartWatch

Nasdaq Composite Index

Analysis

Bloody MarketWatch! That's it... Ring the bell! The crash has started! Run for the hills! 😱

Of course, that's not how we do things here in ChartWatch.

We prefer to say: Some supply has arrived.

How much? Well, looking at the Optimised True Range (OTR), Wednesday's candle was slightly above average. As was volume. So, we're can deduce about average engagement and motivation.

Wednesday's candle, although clearly a supply side showing, did possess a small downward pointing shadow. A smidge of BTD! 🤏

My conclusion? Don't panic. Alert, not alarmed. Waiting for confirmation either way... I.e., the demand side steps back in to BTD... Or we see further evidence that the supply side is taking control of the Comp's price.

Everything else remains intact:

• ST & LT trends ⬆️⬆️ = ✅✅

• Price action = Rising peaks and rising troughs 📈 = ✅

• Candles (even after Weds!) = Predominantly demand side in nature = ✅

• Price action, volume and volatility have not pushed to extremes to suggest a blow off top (a significant supply side candle(s) on elevated volume) = ✅

So, for me, there's really only one thing to do: Stay the course. I may refrain from adding any new long-side exposure until I see a strong BTD response from the demand side. I may be harsher in my assessment of any technicals on individual positions that could facilitate reducing risk / locking in profits. I might even be more open to adding a little risk to short-side exposure.

But it's all very much at the margins stuff. Until I see more of:

• Long supply side candles (i.e., those with long black bodies and or long upward pointing shadows)

• Lower peaks and lower troughs (supply reinforcement and demand removal respectively)

• Close below the short term uptrend ribbon, short term trend ribbon starts to act as a zone of excess supply (i.e., it impedes upward price action).

View

What? Did you expect me to panic after one supply side candle!? 😉 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. 25739 is the closest point of demand, then there's the short term uptrend ribbon (presently 25690-26256). 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

Bloody MarketWatch? I should say: Bloody me! 🤦

I'm two for two in 2 weeks in getting your hopes up... Only for the OTP to tank triple digits the next day! 😭

Funnily enough, both times on a Wedesday, I said something like "I've got a feeling this time the OTP has got a real chance".

Boom! 💥

And yet not a single person reading this sentence is surprised!

View

Fortunately, 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

8888 is the key point of supply. Beyond that, it's 8987-9022 — one could argue: a wall of supply! Demand is the 8485-8861 zone.

(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

Later this week

Friday

• 20:30 USA May Non-Farm Payrolls

  • Employment change: +85,000 forecast vs 115,000 in April

  • Average hourly earnings: +0.3% m/m forecast vs +0.2% m/m in April

  • Unemployment rate: +4.3% forecast vs +4.3% in April

Latest News

Interesting Movers

Trading higher

• +13.1% Treasury Wine Estates (TWE) - investor day outlined a major strategic pivot to focus on 10 key brands, invest in lighter styles and low/no-alcohol wines, and launch a strategic review of its US operations including the high-end Daou label that could result in asset sales; the company said power brands and regional heroes are expected to account for 90% of group sales by 2030.

• +10.0% Racura Oncology (RAC) - reported 97% of its Piggyback Option offer was exercised, raising $24.4 million to advance clinical programs in AML, lung cancer, and anthracycline cardioprotection.

• +8.1% Felix Gold (FXG) - commenced extraction and stockpiling of high-grade massive stibnite vein material at the Treasure Creek Antimony Project in Alaska's Fairbanks Mining District, from the same vein system that previously returned a direct-ore assay of 71.9% antimony.

• +7.7% Archer Materials (AXE) - successfully completed the next stage of its quantum machine learning fraud detection project, with a quantum neural network model benchmarked against classical models on a public financial fraud dataset performing equivalently while generating only one false positive across 118 fraudulent transactions.

• +3.8% Endeavour Group (EDV) - Citi upgraded to Buy, citing scope for market share gains under new management's price leadership strategy despite near-term earnings uncertainty; the company also provided investor day updates on its cost reduction targets.

Trading lower

• -13.5% Frontier Energy (FHE) - launched a conditional placement of 550 million new shares at $0.20 to raise $110 million, completing funding for Stage One financing of its Waroona Renewable Energy Project.

• -4.6% IperionX (IPX) - released its definitive feasibility study for the Titan Critical Minerals Project in Tennessee, outlining an after-tax NPV of US$813 million, a 39% internal rate of return, and US$1.9 billion in free cash flow over 14 years, with staged development capital of approximately US$381 million; the stock fell despite the positive project metrics, likely reflecting the scale of capital required for development.

• -3.1% Superloop (SLC) - Macquarie downgraded to Neutral from Outperform and lifted its price target to $3.70 from $3.50, noting a clear organic earnings growth path to FY29 but flagging that consumer growth was becoming more difficult, creating near-term earnings risks.

Broker Moves

AIC Mines (A1M)

• Retained at buy at Shaw and Partners; Price Target: $1.10

Aeris Resources (AIS)

• Initiated at buy at Canaccord Genuity; Price Target: $0.70

Ampol (ALD)

• Retained at overweight at JPMorgan; Price Target: $39.00 from $38.00

• Retained at outperform at Macquarie; Price Target: $46.50

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

• Retained at buy at Ord Minnett; Price Target: $36.60 from $36.00

AMP (AMP)

• Retained at buy at Citi; Price Target: $1.80

Amotiv (AOV)

• Retained at outperform at Macquarie; Price Target: $11.90

APA Group (APA)

• Initiated at buy at Citi; Price Target: $11.10

Eagers Automotive (APE)

• Retained at outperform at Macquarie; Price Target: $27.10

ARB Corporation (ARB)

• Retained at neutral at Citi; Price Target: $17.40

• Retained at outperform at Macquarie; Price Target: $29.95

• Retained at buy at Ord Minnett; Price Target: $27.80 from $31.00

Autosports Group (ASG)

• Retained at outperform at Macquarie; Price Target: $3.25

ASX (ASX)

• Retained at buy at UBS; Price Target: $62.00

Bapcor (BAP)

• Retained at neutral at Macquarie; Price Target: $0.44

Biome Australia (BIO)

• Retained at buy at Bell Potter; Price Target: $1.00

Capricorn Metals (CMM)

• Downgraded to neutral from buy at Goldman Sachs; Price Target: $16.90 from $17.60

Endeavour Group (EDV)

• Upgraded to buy from neutral at Citi; Price Target: $3.25 from $3.45

Evolution Mining (EVN)

• Upgraded to neutral from sell at Goldman Sachs; Price Target: $12.70 from $13.10

FleetPartners Group (FPR)

• Retained at outperform at Macquarie; Price Target: $3.41

Ingenia Communities Group (INA)

• Retained at buy at Citi; Price Target: $5.00

• Retained at buy at UBS; Price Target: $4.60

IperionX (IPX)

• Retained at speculative buy at Canaccord Genuity; Price Target: $8.90

McMillan Shakespeare (MMS)

• Retained at neutral at Macquarie; Price Target: $18.80

Megaport (MP1)

• Retained at outperform at Macquarie; Price Target: $27.80 from $26.30

Northern Star Resources (NST)

• Retained at outperform at CLSA; Price Target: $33.50 from $33.00

• Retained at underweight at Jarden; Price Target: $21.60 from $22.30

• Retained at buy at Jefferies; Price Target: $32.00 from $32.50

Paladin Energy (PDN)

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

Retail Food Group (RFG)

• Retained at buy at Shaw and Partners; Price Target: $1.50 from $2.00

ResMed Inc. (RMD)

• Retained at buy at Ord Minnett; Price Target: $38.35 from $41.40

Smartgroup Corporation (SIQ)

• Retained at outperform at Macquarie; Price Target: $11.49

Superloop (SLC)

• Downgraded to neutral from outperform at Macquarie; Price Target: $3.70 from $3.50

• Retained at buy at UBS; Price Target: $4.15 from $3.50

SRG Global (SRG)

• Retained at buy at Bell Potter; Price Target: $4.25 from $3.15

Sunstone Metals (STM)

• Retained at buy at Shaw and Partners; Price Target: $2.10

The Lottery Corporation (TLC)

• Retained at neutral at Citi; Price Target: $5.00 from $5.10

• Retained at overweight at Jarden; Price Target: $5.65 from $5.60

• Retained at hold at Jefferies; Price Target: $5.70 from $5.60

• Retained at overweight at JPMorgan; Price Target: $5.70

• Retained at outperform at Macquarie; Price Target: $6.00 from $5.80

• Retained at buy at UBS; Price Target: $6.15 from $6.20

Treasury Wine Estates (TWE)

• Retained at neutral at Citi; Price Target: $4.25

Viridis Mining and Minerals (VMM)

• Retained at speculative buy at Ord Minnett; Price Target: $4.70

Waratah Minerals (WTM)

• Retained at speculative buy at Bell Potter; Price Target: $1.05 from $0.95

Scans