Market Wraps

Evening Wrap: ASX 200 slumps on escalating Mid-East conflict, but golden lining for war winners energy and gold stocks

Fri 04 Oct 24, 5:21pm (AEDT)

Stocks in article

a4n
MktCap:
-
ald
MktCap:
-
ama
MktCap:
-
apa
MktCap:
-
coh
MktCap:
-
cu6
MktCap:
-
eos
MktCap:
-
hmc
MktCap:
-
lnw
MktCap:
-
ltm
MktCap:
-
msb
MktCap:
-
nwh
MktCap:
-
opt
MktCap:
-
stx
MktCap:
-
vea
MktCap:
-

Share article

The S&P/ASX 200 closed 55.2 points lower, down 0.67%.

Started with a bang. Went out with a whimper. That's the week that was for the Australian share market. Monday's new record high of 8285.7 might take some beating now as events in the Middle East conspire to send risk capital to the sidelines.

That is, of course, unless you're in the Energy (XEJ) sector. It rose nearly 2% today, with several stocks in the sector like Strike Energy (STX), Viva Energy Group (VEA), and Ampol (ALD) rising more than that.

The other sector that tends to do well in times of geopolitical uncertainty is gold, and fortunately, we have some of the best gold stocks on the planet listed here on the ASX.

As for everything else, not so good, and you can read all about the swings and roundabouts experienced by Aussie stocks in tonight's Evening Wrap.

Click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all of the key upcoming economic data.

Also, I have detailed technical analysis on Brent Crude Oil plus base metals Nickel, Aluminium, Tin, and Zinc in today's ChartWatch.

Let's dive in!


Today in Review

Fri 04 Oct 24, 4:58pm (AEST)

Name Value % Chg
Major Indices
ASX 200 8,150.0 -0.67%
All Ords 8,416.6 -0.68%
Small Ords 3,102.4 -0.53%
All Tech 3,461.9 -0.11%
Emerging Companies 2,286.5 -0.49%
Currency
AUD/USD 0.6846 +0.09%
US Futures
S&P 500 5,750.5 +0.02%
Dow Jones 42,293.0 -0.06%
Nasdaq 20,009.5 +0.10%
Name Value % Chg
Sector
Energy 9,495.2 +1.84%
Health Care 44,580.2 +0.11%
Communication Services 1,598.7 -0.14%
Industrials 7,358.1 -0.33%
Consumer Discretionary 3,742.6 -0.34%
Consumer Staples 12,293.6 -0.58%
Utilities 9,060.3 -0.62%
Real Estate 4,067.1 -0.91%
Financials 8,029.8 -1.04%
Information Technology 2,659.0 -1.16%
Materials 17,760.5 -1.18%

Enjoying the Evening Wrap? Sign up to get it sent directly to your inbox after every trading day.


Markets

XJO Intraday Chart 04 October 2024
ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 55.2 points lower at 8,150.0, roughly mid-range, 0.52% from its session low and 0.68% from its high. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a convincing 107 to 175.

For the week, the XJO finished down 62.2 points or 0.76% lower, 1.67% from its intraweek high and just 0.52% from its intraweek low.

The Energy (XEJ) (+1.8%) was the best performing sector today, likely in response to the worsening situation in the Middle East, and no doubt you’ve already read about US President Biden’s discussions with Israel about potentially striking Iranian energy assets.

Also doing well today was the other classic geopolitical uncertainty beneficiary, the Gold (XGD) (+0.80%) sub-index.

Company

Last Price

Change $

Change %

1mo %

1yr %

Strike Energy (STX)

$0.230

+$0.02

+9.5%

+35.3%

-43.2%

Black Cat Syndicate (BC8)

$0.515

+$0.02

+4.0%

+45.1%

+145.2%

Viva Energy Group (VEA)

$3.02

+$0.09

+3.1%

+5.2%

+3.4%

Ampol (ALD)

$31.30

+$0.87

+2.9%

+8.8%

-4.7%

Woodside Energy Group (WDS)

$26.64

+$0.58

+2.2%

+6.6%

-23.7%

Evolution Mining (EVN)

$4.62

+$0.1

+2.2%

+17.0%

+40.9%

Karoon Energy (KAR)

$1.645

+$0.035

+2.2%

+8.9%

-38.5%

Santos (STO)

$7.30

+$0.15

+2.1%

+4.0%

-3.1%

Ramelius Resources (RMS)

$2.14

+$0.04

+1.9%

-1.4%

+52.3%

Ora Banda Mining (OBM)

$0.630

+$0.01

+1.6%

+16.7%

+472.7%

Perseus Mining (PRU)

$2.58

+$0.04

+1.6%

+5.3%

+65.4%

St Barbara (SBM)

$0.335

+$0.005

+1.5%

+42.6%

+86.1%

De Grey Mining (DEG)

$1.380

+$0.02

+1.5%

+26.0%

+25.6%

Beach Energy (BPT)

$1.270

+$0.015

+1.2%

+12.4%

-17.5%

Gold Road Resources (GOR)

$1.695

+$0.02

+1.2%

+8.7%

+7.6%

Emerald Resources (EMR)

$3.81

+$0.04

+1.1%

-0.3%

+50.0%

Peninsula Energy (PEN)

$0.098

+$0.001

+1.0%

+34.2%

-25.5%

New Hope Corporation (NHC)

$4.98

+$0.05

+1.0%

+15.8%

-20.3%

Regis Resources (RRL)

$2.02

+$0.02

+1.0%

+14.8%

+34.2%

Genesis Minerals (GMD)

$2.04

+$0.02

+1.0%

-4.7%

+53.4%

The best stocks from the “war winners” sectors today

Doing it tough today was pretty much everything else. Nine of the eleven major sectors finished in the red, with Information Technology (XIJ) (+-%), Financials (XFJ) (+-%), and Real Estate Investment Trusts (XPJ) (+-%) leading the losses.


ChartWatch

Brent Crude Oil Futures (Front month, back-adjusted) ICE

Brent Crude Oil Futures (Front month, back-adjusted) ICE chart 4 October 2024
War, what is it good for?

The last time we covered Brent crude oil was in ChartWatch in the Evening Wrap on 2 October.

I know we only just covered this one on Wednesday, but given events overnight (Biden comments regarding potentially striking Iranian energy assets), plus that long white candle – we absolutely must cover it again!

In that last update, I noted “I suggest we are indeed setting up for a decisive short term trend change here”, and “One more emphatic demand-side candle would likely cap it off”.

Well energy bulls, it turns out Edwin Starr wasn't completely correct, because I’m pretty sure yesterday’s candle is indeed the emphatic demand-side candle that now confirms a resumption of demand-side control.

79.84-80.84 is the next clear zone of supply. I will need to see the candles when we get there to understand just how much of an impediment it might be, but I suspect only moderate upside resistance here given prevailing price action (rising peaks and rising troughs) and candles (a predominance of demand-side candles).

Demand moves to 75.12, and then at the short term trend ribbon which is not far below. I note we’ve also (importantly) close above the long term trend ribbon. It’s possible this also acts as a key potential point of demand.

Obviously, the drivers of demand and supply in this chart are both dynamic and volatile – so don’t be surprised if the price action is as well…

Nickel - LME Official Cash

LME Nickel Official Cash chart 3 October 2024
Every dog has its day

The last time we covered nickel was in ChartWatch in the Evening Wrap on 26 July. Yes, it’s been a while, but to be fair there hasn't been much reason to cover it since then as the price has been bumping along the bottom around the key 15,620 point of demand from February.

The reason for today update is two-fold. First, it’s to highlight just how on fire base metals (and commodities more generally) are right now. China stimulus plus the threat of war – it just doesn’t get any better for them. Secondly, nickel deserves a shout out because this is the first time it’s closed above my long term ribbon and that trend ribbon isn’t down flashing down – having transitioned to neutral as at yesterday’s close.

I’m not saying the bear market is over, that would take a retest and hold of the long term trend ribbon, thus demonstrating it is acting as dynamic demand – but this last rally is looking a little V-shaped – and there’s some action on the fundamental side of things…

More generally, we’ve also noted copper’s improving technicals of late, and the broader LME base metals complex has improved markedly over the last 6 weeks with Aluminium and Tin each probing 2024 highs, and with Zinc actually trading at its highest level since early 2023.

LME Aluminium Official Cash chart 3 October 2024LME Tin Official Cash chart 3 October 2024LME Zinc Official Cash chart 3 October 2024
Charts of LME Aluminium, Tin, and Zinc

Something is up here – particularly if the perennial base metals dog Nickel is potentially starting to move. Some of the other moves are also starting look a little “sticky” with respect to new short and long term uptrends. I’m just saying watch this space.


Economy

Today

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

Later this week

Friday

  • All Day CHN National Day Public Holiday

  • 22:30 USA Non-Farm Payrolls September

    • Employment change 144,000 forecast vs 142,000 previous in August

    • Unemployment rate 4.2% forecast vs 4.2% in August

    • Average Hourly Earnings +0.3% m/m forecast vs +0.4% m/m in August


Latest News


Interesting Movers

Trading higher

  • +10.4% Mesoblast (MSB) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

  • +9.5% Strike Energy (STX) - No news, generally strong ASX energy sector today on rising oil prices post-Mid East conflict escalation

  • +7.8% Light & Wonder (LNW) - Dragon Train Litigation Update

  • +5.1% Electro Optic Systems (EOS) - No news, but several global defence-related stocks rallied overnight due to Mid-East conflict escalation

  • +4.5% Qualitas (QAL) - No news, rise is consistent with prevailing short uptrend, long term trend is transitioning from down to up 🔎📈

  • +4.1% Novonix (NVX) - No news since 3 Oct NOVONIX Announces October Investor Event and Business Update, rise is consistent with prevailing short uptrend 🔎📈

  • +3.1% Viva Energy Group (VEA) - Becoming a substantial holder, ditto stronger ASX energy sector

  • +3.0% Opthea (OPT) - Becoming a substantial holder, rise is consistent with prevailing short and long term uptrends 🔎📈

  • +2.9% Ampol (ALD) - Ditto stronger ASX energy sector

  • +2.7% Arcadium Lithium (LTM) - No news, media report that Rio Tinto (ASX: RIO) is mulling a large lithium acquisition, possibly Albemarle (NYSE: ALB) or Arcadium Lithium. Just rumours for now!

  • +2.4% HMC Capital (HMC) - Media articles regarding potential data centre acquisitions

Trading lower

  • -12.1% Clarity Pharmaceuticals (CU6) - Change of Director's Interest Notices - AT CB CR TR MP

  • -5.7% Droneshield (DRO) - No news

  • -4.9% Bannerman Energy (BMN) - No news

  • -4.8% GQG Partners (GQG) - No news

  • -4.8% Meteoric Resources (MEI) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

  • -4.2% Core Lithium (CXO) - No news, generally weaker day for ASX lithium stocks (apart from LTM), fall is consistent with prevailing long term downtrends 🔎📉

  • -3.9% Liontown Resources (LTR) - No news, ditto ASX lithium, fall is consistent with prevailing short and long term downtrends 🔎📉

  • -3.8% Silex Systems (SLX) - No news

  • -3.8% Nanosonics (NAN) - No news

  • -3.6% NRW (NWH) - HWA Freeway Project - Subcontractor Fatally Injured


Broker Notes

  • Alpha HPA (A4N)

    • Initiated at outperform at Macquarie; Price Target: $1.40

  • Ampol (ALD)

    • Retained at outperform at Macquarie; Price Target: $35.75

  • AMA Group (AMA)

    • Initiated at add at Morgans; Price Target: $0.08

  • APA Group (APA)

    • Downgraded to sell from neutral at UBS; Price Target: $6.60 from $8.05

  • Collins Foods (CKF)

    • Retained at neutral at Macquarie; Price Target: $8.30

  • Cochlear (COH)

    • Upgraded to neutral from sell at Citi; Price Target: $305.00 from $255.00

  • Coles Group (COL)

    • Retained at outperform at Macquarie; Price Target: $20.20

  • Cedar Woods Properties (CWP)

    • Retained at buy at Bell Potter; Price Target: $7.15 from $6.50

  • Domino's Pizza Enterprises (DMP)

    • Retained at neutral at Macquarie; Price Target: $35.00

  • Endeavour Group (EDV)

    • Retained at neutral at Macquarie; Price Target: $5.40

  • Guzman y Gomez (GYG)

    • Retained at hold at Ord Minnett; Price Target: $41.00 from $27.70

  • Hub24 (HUB)

    • Retained at buy at Bell Potter; Price Target: $66.50 from $59.00

  • Harvey Norman (HVN)

    • Retained at outperform at Macquarie; Price Target: $5.00

  • Insurance Australia Group (IAG)

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

  • JB HI-FI (JBH)

    • Retained at outperform at Macquarie; Price Target: $77.00

  • Arcadium Lithium (LTM)

    • Retained at outperform at Macquarie; Price Target: $5.30 from $5.10

  • Metcash (MTS)

    • Retained at outperform at Macquarie; Price Target: $4.20

  • Orica (ORI)

    • Retained at outperform at Macquarie; Price Target: $19.76

  • QBE Insurance Group (QBE)

    • Retained at neutral at Macquarie; Price Target: $17.10

  • Rio Tinto (RIO)

    • Retained at outperform at Macquarie; Price Target: $120.00

  • Steadfast Group (SDF)

    • Retained at outperform at Macquarie; Price Target: $6.80

  • Sigma Healthcare (SIG)

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

  • Suncorp Group (SUN)

    • Retained at neutral at Macquarie; Price Target: $17.00

  • The Lottery Corporation (TLC)

    • Retained at buy at Citi; Price Target: $5.60

  • Treasury Wine Estates (TWE)

    • Retained at outperform at Macquarie; Price Target: $13.90

  • Viva Energy Group (VEA)

    • Retained at outperform at Macquarie; Price Target: $4.10

  • Wesfarmers (WES)

    • Retained at neutral at Macquarie; Price Target: $75.30

  • Woolworths Group (WOW)

    • Retained at neutral at Macquarie; Price Target: $37.00


Scans

Top Gainers

Code Company Last % Chg
FGL Frugl Group Ltd $0.023 +43.75%
IMI Infinity Mining Ltd $0.043 +38.71%
ILA Island Pharmaceut... $0.135 +28.57%
ATV Activeport Group Ltd $0.051 +24.39%
TGH Terragen Holdings... $0.041 +24.24%
View all top gainers

Top Fallers

Code Company Last % Chg
GEN Genmin Ltd $0.055 -29.49%
AQC Australian Pacifi... $0.125 -25.37%
RIM Rimfire Pacific M... $0.031 -18.42%
SNX Sierra Nevada Gol... $0.054 -18.18%
RDG Resource Developm... $0.025 -16.67%
View all top fallers

52 Week Highs

Code Company Last % Chg
ILA Island Pharmaceut... $0.135 +28.57%
FOS FOS Capital Ltd $0.35 +14.75%
RKT Rocketdna Ltd $0.016 +14.29%
WCN White Cliff Miner... $0.024 +14.29%
KKO Kinetiko Energy Ltd $0.11 +12.25%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
GEN Genmin Ltd $0.055 -29.49%
NTI Neurotech Interna... $0.049 -15.52%
LIS Li-S Energy Ltd $0.10 -9.09%
FGR First Graphene Ltd $0.043 -6.52%
MNB Minbos Resources Ltd $0.043 -6.52%
View all 52 week lows

Near Highs

Code Company Last % Chg
IHD Ishares S&P/ASX D... $14.38 -1.17%
CNEW Vaneck China New ... $7.55 +2.72%
BILL Ishares Core Cash... $100.73 +0.01%
HVN Harvey Norman Hol... $4.84 -0.41%
GLDN Ishares Physical ... $31.09 +0.71%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
FHE Frontier Energy Ltd $0.12 +9.09%
NWSLV News Corporation $38.25 -0.39%
IFM Infomedia Ltd $1.48 -2.95%
IXJ Ishares Global He... $140.02 -0.48%
SGR The Star Entertai... $0.265 +1.92%
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.

Get the latest news and insights direct to your inbox

Subscribe free

Get free post-market insights with our Evening Wrap

Create an account to receive our concise, data-driven post-market recap, sent directly to your inbox, every day.

Along with the Evening Wrap, you'll join 100k+ investors who receive our Morning Wrap and Weekend Newsletter.