Evening Wrap: ASX 200 slumps for fifth straight session as rising oil, bond yields hammer mining stocks

The ASX 200 fell as rising benchmark bond yields and crude oil above US$107/bbl delivered a twin blow to gold stocks, miners, and the banks, while the market sought shelter in healthcare and consumer staples. Materials and financials were down = the index was always going to follow... 😭

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!

The S&P/ASX 200 (XJO) finished 77.4 points lower at 8,672.5, 0.9% from its session high and just 0.18% from its low. In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by 116 to 160.

Health Care (XHJ) (+1.5%) was the session's standout — and the logic is straitforward. When materials and financials are falling simultaneously, cash that must stay invested in equities seeks out the most reliable and resilient earnings streams available. Healthcare revenues don't shrink when bond yields rise, crude oil surges, or the RBA hikes rates.

4DMedical (4DX) (+8.7%), Telix Pharmaceuticals (TLX) (+8.6%), and Healius (HLS) (+7.1%) led with sharp individual gains, while ResMed (RMD) (+2.9%), Sonic Healthcare (SHL) (+1.6%), and CSL (CSL) (+1.6%) also advanced.

S&P/ASX 200 Health Care intraday chart

Consumer Staples (XSJ) (+0.9%) attracted the same defensive flows — non-discretionary spending names with reliable earnings that are insulated from the rate cycle and the commodity price complex. The A2 Milk Company (A2M) (+2.7%) was the sector's standout, with Elders (ELD) (+1.3%), GrainCorp (GNC) (+1.2%), Coles (COL) (+1.1%), and Woolworths (WOW) (+0.6%) all firmer.

The Gold Sub-Index (XGD) (-3.1%) was the day's worst performer as rising benchmark bond yields once again increased the opportunity cost of holding non-yielding precious metals — and the simultaneous surge in crude oil above US$107/bbl raised diesel cost pressures on mining operations, squeezing producers from both the revenue and cost sides.

COMEX gold futures fell 0.5% to US$4,331/oz in Asian trade. Santana Minerals (SMI) (-8.0%), Kingsgate Consolidated (KCN) (-6.6%), Ora Banda Mining (OBM) (-5.3%), Ramelius Resources (RMS) (-4.8%), and Evolution Mining (EVN) (-3.1%) were all sharply lower.

Materials (XMJ) (-2.2%) bore the same double burden — higher bond yields compress the global growth outlook and therefore commodity demand, while those higher diesel costs bite. LME copper fell 2.2% overnight before recovering just 0.3% to US$6.386/lb in Asian trade. SGX iron ore futures eased 0.2% to US$95.40/t, failing to hold the US$100 threshold achieved earlier in the month.

Base metals were broadly sold: 29Metals (29M) (-2.9%), BHP (BHP) (-2.2%), Aeris Resources (AIS) (-2.1%), and Sandfire Resources (SFR) (-1.5%) led the copper names lower, with South32 (S32) (-1.4%) also falling. Iron ore stocks were similarly weak — Champion Iron (CIA) (-3.4%), Fortescue (FMG) (-1.9%), and Rio Tinto (RIO) (-2.2%) all retreated.

S&P/ASX 200 Materials intraday chart

Energy (XEJ) (-1.6%) was an unusual loser given ICE Brent crude futures gained 1.6% to US$107.35/bbl — oil up yet the sector down. Possibly some profit-taking after a strong run, or just a case of market sentiment so broadly negative that even the sector most likely to benefit from the surging oil price couldn't escape the tide. Woodside Energy (WDS) (-2.2%) and Santos (STO) (-2.1%) both fell. Two exceptions broke through: New Hope Corp. (NHC) (+3.0%) surged on results, and Karoon Energy (KAR) (+1.1%) also advanced.

Financials (XFJ) (-1.1%) faced the straightforward arithmetic of an impending RBA rate hike — higher rates raise credit quality concerns for an already-stressed mortgage book, compress net interest margin expectations, and signal a deteriorating consumer environment. Commonwealth Bank (CBA) (-1.6%), National Australia Bank (NAB) (-1.3%), ANZ (ANZ) (-1.1%), and Westpac (WBC) (-0.5%) all fell.

S&P/ASX 200 Financials intraday chart

In other commodities moves, lithium stocks endured their fourth consecutive brutal session in what has been a devastating September — GFEX lithium carbonate futures fell 2.4% to CNY 129,120/t, their lowest close since 2025. Core Lithium (CXO) (-9.0%) led the selling, followed by Mineral Resources (MIN) (-4.3%), Wildcat Resources (WC8) (-4.3%), Galan Lithium (GLN) (-4.1%), Elevra Lithium (ELV) (-4.0%), Pilbara Minerals (PLS) (-3.4%), Liontown Resources (LTR) (-2.8%), and IGO (IGO) (-2.3%).

Analysis

Make no mistake… The chart above is an aberration.

Other major global stock markets did not close with such a strong white-bodied candle on Monday.

Consider the RUT chart below, perhaps a better representation of the US share market / US economy? 🤔

RUT chart with our last markings from CharWatch LIVE Webinars

But few global markets are slated to grow their earnings by the same amount that the Comp is forecast to do (+20% give or take next couple years)... So, if the bond yield on this 10-year government bond, or that one, goes from four-point-9-whaterver to 5-point-oh -whatever… in theory, it shouldn’t matter too much.

Arguably, the equity risk premium has only changed at the very margin.

Not so much for us – where our forecast earnings growth is mid-single digits when the commodities boom is taken out (i.e., copper, gold, coal, and oil and gas).

Arguably, we can expect a larger impact at the margin. 😭

And I suggest that’s why our candle today wasn’t so white-bodied, but more about that in the OTP analysis below! 👇

As for the Comp’s chart, it looks solid. More precisely, I should say it still looks solid. Because despite all of the negative plausible narratives doing the rounds, it just keeps dodging those bullets.

But you gotta wonder how many dodges it has left. Particularly if other large global share markets, or economies, start peeling off. Heck, even if the RUT starts peeling off…

Anyways, it is what it is – and what it is – is substantially robust. Therefore, it deserves my respect and my RP!

25910 seems to be holding. The long term uptrend remains intact.

Sure, price action is chop-chop-chop sideways. And candles are mixed (I’d almost err on the side of ‘decent’, though).

So, 50-50 invested vs cash seems like a very reasonable place to be. Flexible enough to add risk if the long term trend re-exerts itself, but also with plenty of cash in the bank if it doesn’t.

Consider too, that cash yields are pretty darn good at the moment. Certainly, it pays to be cautious right now!

View

1/2RP. (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

26701-863 is the closest key point of supply vs 25910-95 as the closest key point of demand, and then the long term trend ribbon (presently 24293-25176).

Analysis

I posted this on X today:

The chart inset of the US 10-year Treasury Bond yield. And yes, that's one hell of a rocket ship emoji! 🚀

It's a nice conundrum to have.

But at the same time, I'd still rather we were making new highs. You see, I've learned to be suspicious of bear markets.

Relax.

I'm not saying we're in a bear market.

We're not.

You know my model. You know when it will say we're in a bear market.

We're not even close.

Simply, that the natural state of the stock market is to go up (most stock markets, even the OTP! 😉). 📈

Also, in my substantial experience in trading bear markets... sigh... yes I am ancient... about the last... um, I wanna say half-dozen of them... well, back to the mid-90's anyway... I can say with total confidence:

They're a bloody lot more difficult to make money and manage your risk in than bull markets.

They're far more volatile (chop-chop-chop in choppy markets trend followers get chopped up! 🪓🪓🪓), and as previously noted: they're not the market's natural state.

It's a fact that they're short, sharp, and very painful.

If you don't know what you're doing, that is...

You've also got pesky politicians and central bankers incentivised to solve the problems that they created – which caused the bear market in the first place – wreaking havoc with your short positions! 🤦

Anyways, it's a nice conundrum to have. Because I could be like most other unwitting investors who prefer the Ostrich Technique. 😁

There are pro's and con's of any investing technique... 🤣

View

1/3RP on Australian shares (i.e., 33% of my capital allocated to ASX shares invested vs 67% cash).

Key Levels

8935-40 is likely to now act as a zone of supply, but the short term trend ribbon (presently 8987-8993) is most likely the biggest barrier the OTP will have to contend with on the way back up. 8708-8656 is the next key zone of demand.

(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 | NUTE: No Urgency To Enter | FOHO: Fear Of Holding On | STR: Sell The Rally | RP: Risk Position | FFS: Fund Flow Shenanigans!)

***CHARTWATCH LIVE WEBINARS 📺🍿***

Are ASX shares headed for a crash? This expert says it's time to protect your capital (and he shows you how to do it)

TODAY

• 11:30 CHN August Data Dump

  • New Home Prices: -0.17% vs -0.18% m/m in July (slightly better than previous, still bad)

  • Fixed Asset Investment: -7.2% ytd/p.a. forecast vs -7.0% ytd/p.a. forecast and -6.7% ytd/p.a. in July (worse than expected and previous, bad)

  • Industrial Production: +5.2% p.a. forecast vs +4.8% p.a. forecast and +4.5% p.a. in July (better than expected, good)

  • Retail Sales: +0.4% p.a. forecast vs +0.8% p.a. forecast and +0.6% p.a. in July (worse than expected, still up, but slowing)

  • Unemployment Rate: 5.3% forecast vs 5.2% forecast and 5.2% in July (worse than expected)

LATER THIS WEEK

WEDNESDAY

• 22:30 USA August Core Retail Sales (+0.5% m/m forecast vs -0.3% m/m previous)

THURSDAY

• 04:00 USA FOMC Meeting

  • Federal Funds Rate: +0.25% p.a. forecast to 3.75% to 4.0% p.a.

  • FOMC Statement & Economic Projections

  • Kevin Warsh press conference at 04:30

• 22:30 USA August Philadelphia Fed Manufacturing Index (28.9 forecast vs 47.4 in August)

FRIDAY

• 09:30 Bank of Japan (BOJ) Policy Rate (+0.25% p.a. forecast to 1.25% to 1.0% p.a.)