Market Wraps

Evening Wrap: ASX 200 slumps on ailing resources as Chinese stock moves point to country's ongoing property woes

Mon 08 Jul 24, 6:25pm (AEST)

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Share article

The S&P/ASX 200 closed 59.1 points lower, down 0.76%.

It was another disappointing retracement from what is looking like "The Zone of Impervious Resistance"!

That pesky 7911 is proving a tough nut to crack!

Particularly when local Resources stocks continue to be undermined by weak commodities prices and a worrying deterioration in the Chinese property market.

We've got all the details on each of these items, plus details of all of the biggest winners and sinners from today's trade on the ASX, so...

Let's dive in!


Today in Review

Mon 08 Jul 24, 4:51pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,763.2 -0.76%
All Ords 8,012.2 -0.72%
Small Ords 2,981.9 -0.19%
All Tech 3,088.8 +0.25%
Emerging Companies 2,155.1 -0.71%
Currency
AUD/USD 0.6745 -0.06%
US Futures
S&P 500 5,613.75 -0.14%
Dow Jones 39,618.0 -0.19%
Nasdaq 20,595.75 -0.12%
Name Value % Chg
Sector
Consumer Discretionary 3,530.6 +0.33%
Information Technology 2,323.1 +0.29%
Consumer Staples 12,351.2 -0.14%
Financials 7,594.2 -0.29%
Industrials 6,745.6 -0.38%
Utilities 9,108.2 -0.73%
Communication Services 1,482.4 -0.86%
Real Estate 3,578.5 -1.00%
Health Care 43,770.0 -1.04%
Energy 10,288.4 -1.45%
Materials 17,121.2 -1.81%

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Markets

XJO Intraday Chart 8 July 2024
ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 59.1 points lower at 7,763.2, 0.76% from its session high and just 0.05% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a dismal 107 to 165.

Only 2 of the 11 major indices closed in the black today: Consumer Discretionary (XDJ) (+0.33%) and Information Technology (XIJ) (+0.29%). The Gold (XGD) (+0.96%) sub-index joined them and was the best performer of the lot.

A combination of stronger US technology stocks on Friday and the growing prospect of lower US rates likely helped Tech and Gold (the latter driving a tidy gain in the gold price). Discretionary’s move was a little more mysterious, perhaps it's still basking in the warm afterglow of last week’s better than expected retail sales data.

Company

Last Price

Change $

Change %

1mo %

1yr %

Red 5 (RED)

$0.395

+$0.02

+5.3%

-13.2%

+102.6%

Resolute Mining (RSG)

$0.630

+$0.03

+5.0%

+15.6%

+55.6%

Emerald Resources (EMR)

$3.82

+$0.15

+4.1%

+1.1%

+73.6%

Dicker Data (DDR)

$10.21

+$0.35

+3.6%

+8.2%

+21.3%

Accent Group (AX1)

$1.905

+$0.05

+2.7%

-3.5%

+11.7%

Evolution Mining (EVN)

$3.73

+$0.09

+2.5%

-5.6%

+10.0%

Capricorn Metals (CMM)

$5.20

+$0.12

+2.4%

+11.1%

+18.7%

Lovisa (LOV)

$32.00

+$0.72

+2.3%

+1.6%

+56.4%

Hansen Technologies (HSN)

$4.56

+$0.09

+2.0%

-0.2%

-10.6%

Audinate Group (AD8)

$15.99

+$0.31

+2.0%

-0.1%

+74.2%

Regis Resources (RRL)

$1.810

+$0.035

+2.0%

-2.4%

-5.7%

Nextdc (NXT)

$18.14

+$0.35

+2.0%

+1.4%

+46.5%

Stocks from the best performing sectors today, XDJ, XIJ, and XGD

Doing it tough today was the Resources (XJR) (-1.74%), hit by a double whammy of a reversal in the iron ore price rally (check that 114 point of supply we discussed in Wednesday’s ChartWatch) and dissolving Chinese property stocks (see tonight’s ChartWatch below).

Whilst acknowledging that the behemoth iron ore stocks did most of the damage in terms of index points today, it’s worth pointing out lithium and batter materials stocks were the worst in terms of percentage losses (again!).

Company

Last Price

Change $

Change %

1mo %

1yr %

Latin Resources (LRS)

$0.160

-$0.015

-8.6%

-34.7%

-50.0%

Vulcan Energy Resources (VUL)

$4.54

-$0.35

-7.2%

-7.0%

+2.7%

29METALS (29M)

$0.425

-$0.02

-4.5%

-15.0%

-51.6%

Syrah Resources (SYR)

$0.320

-$0.015

-4.5%

-28.9%

-64.3%

IGO (IGO)

$5.70

-$0.23

-3.9%

-16.9%

-62.9%

Mineral Resources (MIN)

$56.33

-$1.83

-3.1%

-18.8%

-22.4%

South32 (S32)

$3.70

-$0.12

-3.1%

-4.4%

-3.9%

Champion Iron (CIA)

$6.47

-$0.2

-3.0%

-1.2%

+8.7%

Lynas Rare Earths (LYC)

$6.37

-$0.19

-2.9%

-3.9%

-13.5%

Iluka Resources (ILU)

$6.62

-$0.19

-2.8%

-7.0%

-43.0%

Chalice Mining (CHN)

$1.290

-$0.035

-2.6%

-18.6%

-79.4%

Fortescue (FMG)

$21.82

-$0.59

-2.6%

-9.3%

-1.4%

Rio Tinto (RIO)

$119.90

-$2.97

-2.4%

-3.7%

+5.0%

BHP Group (BHP)

$43.48

-$0.91

-2.1%

-1.3%

-3.4%

ASX Resources stocks today

Energy (XEJ) (-1.45%) also struggled today. Brent and WTI crude prices might be staging their own reversals from key points of supply (I’ll do Brent in tomorrow’s ChartWatch), plus Santos (ASX: STO) (-2.13%), gave up some of its takeover rumour gains.

Still, it wasn't all doom and gloom here – as I note the continuing outperformance of ASX coal stocks.

Company

Last Price

Change $

Change %

1mo %

1yr %

Coronado Global Resources (CRN)

$1.405

+$0.055

+4.1%

+13.8%

-10.2%

Yancoal Australia (YAL)

$7.42

+$0.09

+1.2%

+17.6%

+55.9%

New Hope Corporation (NHC)

$5.04

+$0.02

+0.4%

+0.8%

+5.2%

MMA Offshore (MRM)

$2.69

+$0.01

+0.4%

+1.5%

+129.9%

Whitehaven Coal (WHC)

$8.99

+$0.02

+0.2%

+11.0%

+31.2%

Beach Energy (BPT)

$1.500

-$0.02

-1.3%

-8.0%

+8.3%

Woodside Energy Group (WDS)

$28.74

-$0.52

-1.8%

+6.0%

-17.8%

Santos (STO)

$7.82

-$0.17

-2.1%

+4.0%

+2.8%

Karoon Energy (KAR)

$1.805

-$0.065

-3.5%

+5.6%

-10.6%

ASX Energy stocks today


ChartWatch

SSE Composite (SSEC) (China)

Shanghai Composite Index SSEC chart 8 July 2024
Still making downtrends great again

The last time we covered the SSEC was in ChartWatch in the Evening Wrap on 20 June.

In that update, we noted it was returning to its long term down-trending ways.

That slow motion unravelling continues, and this chart simply cannot be good news for our resources sector, particularly when you consider the next chart…

CSI Mainland Real Estate Index (China)
The Chinese property market remains the weakest link of the Chinese economy

The Chinese property market remains the weakest link of the Chinese economy and threatens to drag it into a Japan-90’s style recession.

There are no redeeming features in term of demand-side control in either of the above charts. There’s just so little resistance to the steady supply-side onslaught: short and long term downtrends (representing sell the rally), falling peaks and falling troughs (representing supply reinforcement and demand removal), and predominantly supply-side candles (large, pervasive programmed sell orders).

Which brings us to our next chart…

S&PASX 200Β Resources Index (XJR) 8 July 2024
The ASX Resources sector needs to print higher troughs and demand-side candles quickly

The local resources sector got a reprieve from the May-June sell off last week, rallying hard through to Thursday’s peak. That rally was not enough to breach the long term downtrend ribbon, and today’s candle has closed the index back below the short term downtrend ribbon.

A lower peak from here, along with further supply-side candles like today’s could precipitate another test of the 5506 low. Beyond that, it could get ugly.

Alternatively, and let’s hope so, we can make a higher trough, and subsequently higher peak to close above the long term downtrend ribbon. White-bodied candles and or downward pointing shadows would be crucial to this scenario – so keep an eye out for them!


Economy

Today

  • There weren't any major economic data releases in our time zone today

Later this week

Tuesday

  • 10:30 Westpac Consumer Sentiment July (+1.7% in June)

  • 11:30 NAB Business Confidence June (-3 in May)

Wednesday

  • 00:00 USA Federal Reserve Chairman Jerome Powell delivers Semi-Annual Monetary Policy Report to Senate Banking Committee

  • 11:30 CHN Consumer Price Index (CPI) and Producer Price Index (PPI) June inflation data

    • CPI: +0.4% p.a. forecast vs +0.3% p.a. in May

    • PPI: -0.8% p.a. forecast vs -1.4% p.a. in May

Thursday

  • 00:00 USA Federal Reserve Chairman Jerome Powell testimony Day 2

  • 10:30 USA Core CPI June (forecast +0.2% m/m and +3.5% p.a. vs +0.2% m/m and +3.5% in May)

Friday

  • 10:30 USA Core PPI June (forecast +0.1% m/m and +2.0% p.a. vs +0.0% m/m and +1.8% in May)

Saturday

  • 00:00 USA Preliminary University of Michigan Consumer Sentiment July (67.0 forecast vs 68.2 in June)


Latest News


Interesting Movers

Trading higher

  • Core Lithium (CXO) +9.9% - Production and Financial Position Update

  • Zip Co. (ZIP) +5.8% - No news, rise is consistent with prevailing short and long term uptrends πŸ”ŽπŸ“ˆ

  • Weebit Nano (WBT) +5.7% - No news πŸ€”

  • Red 5 (RED) +5.3% - Restructured Finance Facility and June Quarter Results, bounced off long term uptrend ribbon πŸ”ŽπŸ“ˆ

  • Resolute Mining (RSG) +5.0% - No news, generally stronger ASX gold sector today on rising gold price, rise is consistent with prevailing short and long term uptrends πŸ”ŽπŸ“ˆ

  • Tuas (TUA) +4.7% - No news, rise is consistent with prevailing short and long term uptrends πŸ”ŽπŸ“ˆ

  • Emerald Resources (EMR) +4.1% - Record Full Year Production of 114koz Achieved at Okvau, generally stronger ASX gold sector today on rising gold price, rise is consistent with prevailing short and long term uptrends πŸ”ŽπŸ“ˆ

  • Coronado Global Resources (CRN) +4.1% - No news, generally stronger ASX coal sector today, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up πŸ”ŽπŸ“ˆ

  • Gentrack Group (GTK) +3.6% - No news, rise is consistent with prevailing short and long term uptrends πŸ”ŽπŸ“ˆ

  • Dicker Data (DDR) +3.6% - No news πŸ€”

  • Droneshield (DRO) +3.1% - No news, rise is consistent with prevailing short and long term uptrends πŸ”ŽπŸ“ˆ

  • Clarity Pharmaceuticals (CU6) +2.8% - No news, rise is consistent with prevailing short and long term uptrends πŸ”ŽπŸ“ˆ

  • Pro Medicus (PME) +2.6% - No news, rise is consistent with prevailing short and long term uptrends πŸ”ŽπŸ“ˆ

Trading lower

  • Meteoric Resources (MEI) -13.9% - Caldeira's Scoping Study Confirms Exceptional Financials, fall is consistent with prevailing short term downtrend, long term trend is transitioning from up to down πŸ”ŽπŸ“‰

  • Clinuvel Pharmaceuticals (CUV) -10.8% - No news, reversed Friday's gain πŸ€”

  • Latin Resources (LRS) -8.6% - No news, generally weaker ASX lithium sector today, prices remain depressed, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰

  • Vulcan Energy Resources (VUL) -7.2% - No news, generally weaker ASX lithium sector today, prices remain depressed, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰

  • Botanix Pharmaceuticals (BOT) -5.9% - No news πŸ€”

  • 29METALS (29M) -4.5% - No news, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰

  • Syrah Resources (SYR) -4.5% - No news, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰

  • Arcadium Lithium (LTM) -4.5% - No news, generally weaker ASX lithium sector today, prices remain depressed, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰

  • WA1 Resources (WA1) -4.0% - No news πŸ€”

  • IGO (IGO) -3.9% - No news, generally weaker ASX lithium sector today, prices remain depressed, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰

  • Cettire (CTT) -3.8% - No news, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰

  • Bluescope Steel (BSL) -3.6% - No news, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰

  • Karoon Energy (KAR) -3.5% - No news, fall is consistent with prevailing short and long term downtrends πŸ”ŽπŸ“‰


Broker Notes

Abacus Group (ABG)

  • Retained at buy at Shaw and Partners; Price Target: $1.20

Austin Engineering (ANG)

  • Retained at buy at Shaw and Partners; Price Target: $0.75 from $0.60

Ansell (ANN)

  • Retained at outperform at Macquarie; Price Target: $28.15

ANZ Group (ANZ)

  • Retained at sell at Citi; Price Target: $24.50

  • Retained at underperform at Macquarie; Price Target: $26.50

Abacus Storage King (ASK)

  • Retained at buy at Shaw and Partners; Price Target: $1.35 from $1.30

Bendigo and Adelaide Bank (BEN)

  • Retained at underperform at Macquarie; Price Target: $9.25

Boss Energy (BOE)

  • Retained at buy at Bell Potter; Price Target: $5.90 from $6.35

Bank of Queensland (BOQ)

  • Retained at underperform at Macquarie; Price Target: $4.75

Car Group (CAR)

  • Retained at neutral at Macquarie; Price Target: $32.70

Commonwealth Bank of Australia (CBA)

  • Retained at sell at Citi; Price Target: $85.00

  • Retained at underperform at Macquarie; Price Target: $95.00

Capricorn Metals (CMM)

  • Retained at neutral at Macquarie; Price Target: $5.10

Insurance Australia Group (IAG)

  • Retained at outperform at Macquarie; Price Target: $8.00 from $6.40

Judo Capital (JDO)

  • Retained at underperform at Macquarie; Price Target: $1.00

Johns Lyng Group (JLG)

  • Retained at buy at Citi; Price Target: $7.85 from $7.50

Lendlease Group (LLC)

  • Retained at neutral at Macquarie; Price Target: $8.03

Mirvac Group (MGR)

  • Retained at outperform at Macquarie; Price Target: $2.26

National Australia Bank (NAB)

  • Retained at sell at Citi; Price Target: $26.50

  • Retained at underperform at Macquarie; Price Target: $32.50

Paladin Energy (PDN)

  • Retained at buy at Bell Potter; Price Target: $15.70 from $16.10

Percheron Therapeutics (PER)

  • Initiated at buy at Bell Potter; Price Target: $0.14

REA Group (REA)

  • Upgraded to outperform from neutral at Macquarie; Price Target: $212.00 from $196.00

Siteminder (SDR)

  • Retained at buy at Citi; Price Target: $6.15 from $6.30

Stockland (SGP)

  • Retained at neutral at Macquarie; Price Target: $3.98

Strike Energy (STX)

  • Retained at buy at Bell Potter; Price Target: $0.31

Suncorp Group (SUN)

  • Retained at neutral at Citi; Price Target: $17.50 from $16.60

  • Retained at overweight at Jarden; Price Target: $17.15 from $17.00

  • Retained at buy at Jefferies; Price Target: $18.93 from $18.25

  • Retained at overweight at JP Morgan; Price Target: $17.00 from $16.50

  • Downgraded to neutral from outperform at Macquarie; Price Target: $15.80 from $17.00

  • Retained at overweight at Morgan Stanley; Price Target: $20.20

  • Retained at hold at Ord Minnett; Price Target: $18.20

Southern Cross Electrical Engineering (SXE)

  • Retained at buy at Shaw and Partners; Price Target: $2.00 from $1.80

West African Resources (WAF)

  • Retained at outperform at Macquarie; Price Target: $2.00 from $1.90

Westpac Banking Corporation (WBC)

  • Retained at sell at Citi; Price Target: $24.75

  • Retained at underperform at Macquarie; Price Target: $26.00


Scans

Top Gainers

Code Company Last % Chg
RXM REX Minerals Ltd $0.43 +56.36%
LVH Livehire Ltd $0.02 +53.85%
ENV Enova Mining Ltd $0.013 +30.00%
REM Remsense Technolo... $0.031 +29.17%
FBR FBR Ltd $0.041 +28.13%
View all top gainers

Top Fallers

Code Company Last % Chg
1MCDA Morella Corporati... $0.043 -28.33%
XPN Xpon Technologies... $0.012 -25.00%
PAM Pan Asia Metals Ltd $0.125 -21.88%
PNM Pacific Nickel Mi... $0.024 -20.00%
TTT Titomic Ltd $0.105 -19.23%
View all top fallers

52 Week Highs

Code Company Last % Chg
RXM REX Minerals Ltd $0.43 +56.36%
FBR FBR Ltd $0.041 +28.13%
PHX Pharmx Technologi... $0.055 +22.22%
ENR Encounter Resourc... $0.825 +13.01%
SKS SKS Technologies ... $1.125 +12.50%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
1MCDA Morella Corporati... $0.043 -28.33%
PAM Pan Asia Metals Ltd $0.125 -21.88%
PNM Pacific Nickel Mi... $0.024 -20.00%
LMS Litchfield Minera... $0.135 -15.63%
FGL Frugl Group Ltd $0.047 -14.55%
View all 52 week lows

Near Highs

Code Company Last % Chg
LPGD Loftus Peak Globa... $4.80 +1.27%
AMH Amcil Ltd $1.15 +2.22%
MFF MFF Capital Inves... $3.88 +0.78%
ALL Aristocrat Leisur... $50.65 -0.61%
BEN Bendigo and Adela... $11.49 +0.88%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
VVLU Vanguard Global V... $65.87 -1.48%
QSML Vaneck MSCI Intl ... $26.76 -1.04%
VLUE Vaneck MSCI Inter... $24.90 -0.28%
CNEW Vaneck China New ... $5.46 -1.80%
CCX City Chic Collect... $0.125 +4.17%
View all RSI oversold

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience, helping investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.

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